Interest Calculator
Compute simple and compound interest for loans and savings. See interest earned or owed on any principal, rate and term.
About this tool
This interest calculator compares simple and compound interest side by side. Enter a principal, an annual rate, a term and a compounding frequency, and it shows the final amount and the interest earned or owed in both models.
The difference between the two is the whole secret of investing: compound interest lets your money grow on itself. The same tool works for savings, CDs, bonds and credit-card-style debts where interest accrues daily.
FAQ
What is simple interest?
Interest is calculated only on the original principal: interest = principal x rate x time. It does not grow on prior interest.
What is compound interest?
Interest is added to the balance, so future interest is earned on interest. Annual compounding at 5% doubles money in about 14.2 years.
How often do banks compound?
Savings accounts usually compound daily and pay monthly. Loans typically compound monthly for the amortization schedule.