Interest Calculator
Calculate simple and compound interest to see how your money grows over time.
Results
What is an Interest Calculator?
An interest calculator helps you determine how much money you will earn or owe based on a principal amount, interest rate, and time period. It supports both simple interest, where interest is calculated only on the original principal, and compound interest, where interest is earned on previously accumulated interest.
How to Use This Calculator
- Enter your starting principal amount.
- Input the annual interest rate as a percentage.
- Specify the number of years the money will grow or be borrowed.
- Select the compounding frequency: simple, annually, monthly, or daily.
- Click Calculate to see interest earned, total amount, and effective annual rate.
Frequently Asked Questions
What is the difference between simple and compound interest?
Simple interest is calculated only on the original principal amount. Compound interest is calculated on the principal plus any interest that has already been added, leading to faster growth over time.
What is the effective annual rate (EAR)?
The effective annual rate reflects the actual return after accounting for compounding within the year. For example, 5% compounded monthly has an EAR slightly higher than 5%.
How does compounding frequency affect my earnings?
The more frequently interest is compounded, the more you earn. Daily compounding yields slightly more than monthly, which yields more than annual compounding.
Can I use this for loans as well as savings?
Yes. Enter the loan principal and rate to see how much total interest you will pay over the term. This helps compare loan offers and savings accounts.