Interest Calculator
Free online interest calculator — calculate simple and compound interest on savings, loans, and investments with instant results.
Simple Interest vs. Compound Interest
Simple interest is calculated only on the original principal amount. It's straightforward and predictable:
I = P × r × t
Where I is the interest, P is the principal, r is the annual rate, and t is the time in years.
Compound interest is calculated on the principal plus any previously earned interest, which is why it grows faster over time:
A = P(1 + r/n)nt
Where A is the final amount, n is the number of times interest compounds per year, and the other variables are the same.
Example
$10,000 at 5% for 3 years:
- Simple interest: $1,500 total interest
- Compound interest (monthly): $1,614.72 total interest
The difference grows significantly with larger amounts and longer time periods.