Interest Calculator
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Calculate simple or compound interest on any principal amount. See total interest earned or owed and the final balance.
Enter your values below and click Calculate for instant results.
Interest is the cost of borrowing money or the return on lending it. How that interest is calculated makes a significant difference over time, and the distinction between simple and compound interest is one of the most important concepts in personal finance.
Simple interest calculates the return based only on the original principal. Each period's interest payment is the same. Compound interest calculates each period's return on the growing balance — principal plus all previously earned interest — which creates accelerating growth over time.
💡 Simple interest is most commonly used for short-term loans, car loans, and some personal loans. Compound interest is what drives savings accounts, investment accounts, and most long-term financial products. When borrowing, simple interest is generally better. When saving or investing, compound interest is your best friend.
The formula is: Interest = Principal × Rate × Time. A $10,000 deposit at 5% simple interest for 3 years earns exactly $500 per year, for a total of $1,500 in interest. The ending balance would be $11,500. The calculation is transparent and predictable.
The same $10,000 at 5% compounded annually for 3 years grows to $11,576 — $76 more than simple interest. The difference seems small at 3 years, but at 30 years the gap is enormous: simple interest would give you $25,000 total while annual compounding delivers $43,219. Monthly compounding grows it further still.