Interest Calculator
Interest Calculator — calculate simple and compound interest instantly for savings, loans, and investments. Free, accurate, no signup required.
About Interest Calculator
The Interest Calculator computes simple and compound interest instantly from three inputs: principal, rate, and time. Whether you are projecting the growth of a savings account, comparing loan offers, or understanding how debt accumulates over time, this tool gives you precise numbers without needing a spreadsheet or financial advisor for basic calculations.
Interest is the core mechanism of all lending and saving. Understanding it is essential for making informed financial decisions — but the math, especially for compound interest over long periods, is not intuitive. Small differences in interest rates compound into large differences in total cost or total return when projected over years.
Simple interest is straightforward: a $10,000 principal at 5% annual simple interest earns $500 per year, regardless of how long the loan or investment runs. Total interest for five years is $2,500. Simple interest is used for short-term loans, some personal loans, and certain bonds.
Compound interest is fundamentally different: you earn (or pay) interest on the accumulated interest from prior periods, not just the original principal. That same $10,000 at 5% compounded annually earns $500 in year one, but $525 in year two (5% of $10,500), $551.25 in year three, and so on. After five years, compound interest yields $2,762.82 — over $260 more than simple interest. The gap widens dramatically over longer periods and higher rates.
Compounding frequency matters too. Daily compounding produces slightly more than monthly, which produces more than annual — even at the same stated rate. Savings accounts often advertise APY (Annual Percentage Yield) to reflect this difference from the stated APR.
This calculator is useful for comparing loan offers side by side, projecting retirement savings growth, evaluating whether early loan payoff saves meaningful interest, and understanding how credit card debt grows when only minimum payments are made.
All calculations run in your browser. No data is transmitted or stored. Free with no account required.
Frequently asked questions
Simple interest is calculated only on the original principal, while compound interest is calculated on the principal plus any previously earned interest. Compound interest grows faster over time because you earn interest on interest.
You need three values: the principal amount (initial investment or loan balance), the annual interest rate as a percentage, and the time period. For compound interest, you also specify how frequently it compounds — daily, monthly, or annually.
Yes. Whether you are estimating returns on a savings account or calculating total interest owed on a loan, this calculator works for both scenarios.
More frequent compounding results in slightly higher total interest. Daily compounding produces more than monthly, which produces more than annual — even at the same stated annual rate. This is why savings accounts often advertise APY (Annual Percentage Yield) alongside APR.