Interest Calculator

Use our interest calculator to see how your money can grow over time with simple or compound interest. Calculate future values, interest earnings, and compare different interest rates and compounding frequencies.

Interest Calculator

Basic Information

$

The initial amount of money invested or borrowed

%

Annual interest rate as a percentage

Duration of investment or loan

Interest Settings

Choose between simple or compound interest calculation

How often interest is added to the principal

Formula Preview

$$A = P(1 + r/n)^{(nt)}$$

Where A = final amount, P = principal, r = interest rate (decimal), n = compounding periods per year, t = time in years

How Interest Works

Interest is the cost of borrowing money or the reward for saving it. It's calculated as a percentage of the principal amount (the initial amount of money) over a specific period of time.

When you save or invest money, you earn interest on your capital. When you borrow money, you pay interest on the loan. Interest can be calculated in two main ways: simple interest and compound interest.

Types of Interest

Simple Interest

Simple interest is calculated only on the initial principal. No matter how long the term is, interest is not earned on previously accumulated interest. Simple interest is typically used for short-term loans or bonds.

Compound Interest

Compound interest is calculated on the initial principal and also on the accumulated interest over previous periods. This means your money grows exponentially over time, making it powerful for long-term investments.

Compounding Frequency

The frequency with which interest is calculated and added to the principal affects the total amount earned. Common compounding periods include daily, monthly, quarterly, semi-annually, and annually. More frequent compounding results in higher returns.

Interest Calculation Formulas

Simple Interest Formula

Simple interest is calculated using the formula:

$$A = P(1 + rt)$$

Compound Interest Formula

Compound interest is calculated using the formula:

$$A = P(1 + r/n)^{(nt)}$$

How to Use Our Interest Calculator

  1. Enter the principal amount (initial investment or loan amount).
  2. Input the interest rate as an annual percentage.
  3. Specify the time period in years, months, or days.
  4. Select the interest type (simple or compound) and, if applicable, the compounding frequency.

The calculator will instantly show you the total amount, interest earned, and effective annual rate. You can also view a detailed breakdown of how your money grows over time through charts and tables.