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Interest Calculator
About the Interest Calculator
Calculate either simple or compound interest on a principal and see how it grows over time.
How to use the Interest Calculator
- Enter the Principal and choose the Mode: Simple Interest or Compound Interest.
- Enter the Annual Rate (%) and the number of Years.
- Press View Growth.
Formula and method
Simple: I = P Γ r Γ t. Compound: A = P Γ (1 + r)α΅.
Worked example
$1,000 at 5% for 10 years earns $500 in simple interest, or grows to $1,628.89 with compound interest.
When to use the Interest Calculator
- Finding how much interest a deposit will earn or a loan will cost over a set period.
- Comparing what different rates mean in real money.
- Checking the interest portion of a statement or invoice.
Common mistakes to avoid
- Mixing up simple and compound interest. The results differ more and more as the time gets longer.
- Entering the rate as a decimal in a field that expects a percentage (0.05 instead of 5).
- Using months for the term when the tool expects years.
Tips
- Over long periods compound interest grows much faster than simple interest.
- For loans, check which type your lender uses.
Frequently Asked Questions
Compound interest, because you earn interest on your interest.
The rate is the basic cost of borrowing. The APR adds most fees so it shows a fuller yearly cost.
It depends on the product. Banks may compound daily, monthly or yearly, and this changes the final amount.