Money Calculator
Interest Calculator
Calculate simple or compound interest on savings or debt.
Total after interest
$7,000.00
- Interest earned
- $2,000.00
How it works
Simple interest is calculated only on the original principal for the entire period — the amount of interest earned each year is the same. Compound interest is calculated on the principal plus any interest already earned, so it grows faster the more frequently it compounds.
Most savings accounts, CDs, and credit cards use compound interest. Some personal loans and older-style bonds use simple interest.
Formula
Simple: Interest = Principal × Rate × Time Compound: Total = Principal × (1 + Rate ÷ n)^(n × Time), where n is the number of times interest compounds per year
Example
$5,000 at 4% for 10 years: simple interest earns $2,000 total ($5,000 × 0.04 × 10). The same amount compounded monthly grows to about $7,454.16 — $2,454.16 in interest, because each month's interest starts earning its own interest.
Frequently asked questions
What's the difference between simple and compound interest?
Simple interest is calculated only on the original principal, so it grows at a constant rate. Compound interest is calculated on the principal plus previously earned interest, so it grows faster over time — the more frequently it compounds, the faster it grows.
What compounding frequency should I use?
Check your account terms — savings accounts commonly compound daily or monthly, while some bonds and CDs compound annually or semiannually. More frequent compounding produces a slightly higher return at the same stated rate.
Does this account for additional contributions?
No — this calculates interest on a single lump-sum principal. Regular contributions would require a separate savings-growth calculation.
Related calculators
Percentage Calculator
Money
Find percentages, increases, and decreases instantly.
Tip Calculator
Money
Calculate tips and split the bill fairly.
Discount Calculator
Money
Find sale prices and total savings.
Mortgage Calculator
Money
Estimate your monthly mortgage payment.
Rent Calculator
Money
Figure out how much rent you can afford.