Interest Calculator
Calculate simple or compound interest on your investments and loans. Determine how much interest you'll earn or pay over time.
Calculate Interest
Results
How Interest Calculation Works
Simple Interest
Simple interest is calculated only on the principal amount. The formula is:
This method is commonly used for short-term loans and basic savings accounts.
Compound Interest
Compound interest is calculated on both the principal and accumulated interest. The formula is:
Where A is the amount, P is principal, r is annual rate, n is compounding frequency, and t is time.
Example Calculation
For a $10,000 investment at 5% annual interest for 5 years:
- Simple Interest: $2,500 interest, $12,500 total
- Compound Interest (Annual): $2,762.82 interest, $12,762.82 total
- Compound Interest (Monthly): $2,833.59 interest, $12,833.59 total
Interest Calculation Tips
- ✓Higher compounding frequency increases returns
- ✓Time is the most powerful factor in compound interest
- ✓Consider inflation when evaluating real returns
- ✓Compare APY (Annual Percentage Yield) for accurate comparisons
- ✓Reinvest interest to maximize compound growth
- ✓Start investing early to benefit from compound interest
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