Interest Calculator
Compare simple and compound interest on the same principal side by side.
What the Interest Calculator does
Simple interest is charged on the principal alone; compound interest is charged on the principal plus everything earned so far. The gap between them starts small and widens every year — the core reason long-term saving works.
Formula
Simple: I = P × r × tCompound: A = P(1 + r/n)^(nt), I = A − P
Inputs explained
| Input | Unit | Required | Notes |
|---|---|---|---|
| Principal | selected currency | Yes | Accepts more than 0. |
| Annual interest rate | % | Yes | — |
| Time period | years | Yes | Accepts more than 0, up to 100. |
| Compounding frequency | one of 7 options | Yes | — |
| Currency | one of 10 options | Optional | — |
How to use it
- Choose Compounding frequency and Currency.
- Enter Principal, Annual interest rate and Time period.
- Select Calculate.
Worked example
$20,000 at 7% for 15 years, compounded monthly.
- Principal
- 20000
- Rate
- 7
- Years
- 15
Simple interest $21,000 against compound $36,978.93 — compounding adds $15,978.93, turning $41,000 into $56,978.93.
Frequently asked questions
Which do banks use?
Savings accounts and most loans compound. Simple interest shows up on short-term notes, some auto loans and many bond coupon payments.