Interest Calculator
Calculate simple and compound interest for savings, investments, or loans.
Interest Calculator
Calculate Simple and Compound Interest.
Understanding Interest Calculations
Interest is the cost of borrowing money or the return on an investment. Our calculator helps you compute both simple and compound interest, which are calculated differently and have significantly different outcomes over time.
Simple vs. Compound Interest
Simple Interest is calculated only on the original principal amount. It's a straightforward calculation used for certain types of loans.
Formula: Interest = Principal × Rate × Time
Compound Interest is calculated on the initial principal and also on the accumulated interest from previous periods. This "interest on interest" effect can lead to exponential growth.
Formula: A = P(1 + r/n)ⁿᵗ
Where: A=Total Amount, P=Principal, r=Rate, n=Compounding periods/year, t=Time in years.