Interest Calculator

Use this free interest calculator for simple interest and compound interest, kept clearly separate. Choose the type, enter the principal, annual rate, and time in years, and this tool shows the interest earned or owed and the total amount in seconds — no sign-up, no account, and no personal information needed. Your numbers are calculated in your browser and are not sent to us.

Contents: Formula · How to use · Examples · Tips · FAQ · Related tools · Sources

No sign-up required. This tool works in your browser, so the amounts you enter are not stored or sent to us. It is an estimate only: it does not include fees, taxes, inflation, or changes in the rate over time. It is not financial advice.

Interest Calculator Formula

Simple interest and compound interest are different, so they must not be mixed up. Simple interest is calculated only on the original principal. Compound interest is calculated on the principal plus the interest already earned, so the balance grows faster over time.

Simple interest = Principal × Rate ÷ 100 × Time in years

Simple total = Principal + Simple interest

Compound total = Principal × (1 + (Rate ÷ 100 ÷ Compounding periods per year)) ^ (Periods per year × Years)

Compound interest = Compound total − Principal

For example, $1,000 at 5% for 3 years gives simple interest of $1,000 × 5 ÷ 100 × 3 = $150, for a total of $1,150. The same amount compounded yearly gives $1,000 × 1.05 ^ 3 = $1,157.63, so compound interest is $157.63. The difference is small over 3 years, but it grows much larger over 20 or 30 years.

How to Use the Interest Calculator

First, choose Simple interest or Compound interest. Then type the principal — the starting amount — the annual rate as a percentage, and the time in years. If you chose compound interest, also choose how often interest is added: yearly, half-yearly, quarterly, or monthly. Tap Calculate Interest, and the result shows the interest and the total separately.

Use simple interest for a short loan or a simple savings estimate where interest is not added to the balance. Use compound interest for most savings accounts, investments, and loans where interest is added to the balance and then earns interest itself. The interest calculator shows both results in the same currency you enter, so it works in the United States, the United Kingdom, and Canada without a currency conversion.

Interest Calculator Examples

Example 1 — Simple interest: $1,000 at 5% for 3 years. Interest = $1,000 × 5 ÷ 100 × 3 = $150. Total = $1,150.

Example 2 — Compound interest, yearly: $1,000 at 5% for 3 years. Total = $1,000 × 1.05 ^ 3 = $1,157.63. Interest = $157.63.

Example 3 — Compound interest, monthly: $1,000 at 5% for 3 years. Total = $1,000 × (1 + 0.05 ÷ 12) ^ 36 = $1,161.47. Interest = $161.47. Monthly compounding gives a little more than yearly compounding, because interest is added sooner.

These examples show the key lesson: for the same principal, rate, and time, compound interest is always at least as large as simple interest, and the gap grows with time and with more frequent compounding.

Interest Calculator Tips

Always check whether a quoted rate is annual or monthly, and whether compounding is yearly or monthly, because those details change the result. For background on interest and compounding, see Wikipedia's article on interest. If you compare two savings accounts, compare them with the same principal, rate, and time, and use the same compounding frequency for a fair comparison. Remember that this tool does not predict future rates, which can rise or fall.

Interest Calculator FAQ

What is the difference between simple and compound interest? Simple interest is calculated only on the original principal. Compound interest is calculated on the principal plus interest already earned, so it grows faster.

How do I calculate simple interest? Multiply the principal by the annual rate as a decimal and by the time in years: $1,000 × 0.05 × 3 = $150.

How do I calculate compound interest? Use the compound formula above, with the rate divided by the number of compounding periods per year, raised to the total number of periods.

Does more frequent compounding give more interest? Yes, a little more. Monthly compounding adds interest sooner than yearly compounding, so the balance grows slightly faster.

Is this tool for loans or savings? Both. The math is the same: interest earned on savings and interest owed on a loan use the same formulas, with the direction reversed.