Financial Calculator
Calculate simple or compound interest instantly. Enter your principal, interest rate, and time horizon to see your total earnings, effective APY, and a full year-by-year growth schedule.
Interest Calculator
Adjust values to see results update instantly
Total Interest Earned
$6,288.95
End Balance
$16,288.95
Principal + interest
Effective APY
5.116%
Annual percentage yield
Total Growth
62.89%
% increase from principal
Avg. Yearly Gain
$628.90
Interest ÷ years
| Year | Interest Earned | Cumulative Interest | End Balance |
|---|
Formula
Two formulas govern interest calculations. Simple interest grows linearly on the original principal. Compound interest grows exponentially because earned interest is reinvested each period.
Simple Interest Formula
I = P × r × t
I
$5,000.00
Interest earned
P
$10,000
Principal
r
5.00%
Annual rate
t
10 yrs
Time in years
Compound Interest Formula
A = P(1 + r/n)nt
A
$16,288.95
End balance
P
$10,000
Principal
r
5.00%
Annual rate
n
12
Periods/year
t
10 yrs
Time in years
About
Understanding how interest compounds is fundamental to every savings goal, investment strategy, and debt repayment plan. Small differences in rate or compounding frequency create dramatically different outcomes over time.
Exponential Growth
Compound interest accelerates wealth accumulation — your interest earns interest, creating an exponential growth curve that dramatically outpaces simple interest over time.
Time Is Your Ally
The longer your investment horizon, the more powerful compounding becomes. Starting just 5 years earlier can increase your final balance by 25–30% at typical rates.
Rate Sensitivity
A 1% rate difference on a $100,000 deposit over 20 years changes your ending balance by more than $25,000. Always compare effective APY rather than nominal rates.
Compounding Frequency
Daily compounding on 5% nominal rate gives an APY of 5.127%, while annual compounding stays at exactly 5%. Over 30 years, that small difference adds thousands.
Simple vs Compound
Simple interest is used in short-term loans and bonds. Compound interest drives savings accounts, CDs, and most investments. Knowing which applies helps you make better financial decisions.
Plan & Compare
Use this calculator to compare savings accounts, evaluate CD ladders, assess bond yields, or estimate debt growth — all with transparent, formula-driven results you can trust.
How To Use
Our interest calculator updates instantly as you type, so there's no need to click "calculate." Follow these steps for accurate results.
Choose Interest Type
Select "Simple Interest" for straightforward linear growth on the original principal, or "Compound Interest" to model savings accounts, CDs, and investments where interest earns interest each period.
Enter Your Principal
Type or slide the amount you are depositing or investing today. This is your starting balance — the base on which interest is calculated. For compound interest, it's the initial deposit only (no recurring contributions).
Set Rate & Time
Enter the annual interest rate offered by your bank or investment. Then set the number of years you plan to hold the deposit. For compound interest, also choose how often interest is added — monthly is the most common for savings accounts.
Read Your Results
The summary card shows total interest earned, end balance, effective APY, and average yearly gain. Switch to the "Over time" tab to see the stacked growth chart, "Breakdown" for a donut chart, or "Schedule" for a year-by-year table.
Compare Scenarios
Try different compounding frequencies to see how daily vs monthly compounding affects your APY. Increase the time period to visualise the power of long-term compounding, or compare two rates to choose the better savings account.
Print or Share
Use the print button to save a clean summary of your results. The printout includes all key figures — useful for financial planning meetings, school projects, or keeping records of your savings goals.
FAQ
Common questions about simple interest, compound interest, APY, and how to use this calculator.
Simple interest is calculated only on the original principal — it grows linearly. Compound interest is calculated on the principal plus all previously earned interest, so it grows exponentially. Over long periods, compound interest produces significantly higher balances.
APY (Annual Percentage Yield) represents the real annual return after accounting for compounding within the year. The formula is APY = (1 + r/n)ⁿ − 1, where r is the nominal rate and n is compounding periods per year. A 5% rate compounded monthly gives an APY of 5.116%.
More frequent compounding always yields more interest: daily > weekly > monthly > quarterly > semi-annually > annually. The theoretical maximum is continuous compounding (A = Pe^rt), but practically the difference between daily and monthly compounding is small — less than 0.01% at typical rates.
No — this calculator focuses on a single lump-sum principal. For scenarios where you add money each month (like a retirement account), use our Savings Calculator or Investment Calculator, which both support periodic contributions and withdrawal schedules.
The Rule of 72 is a shortcut to estimate how long it takes money to double: divide 72 by the annual interest rate. At 6%, money doubles in about 12 years (72 ÷ 6). At 8%, it doubles in 9 years. It works best for compound interest at rates between 6% and 10%.
Inflation erodes purchasing power. Your real return is approximately your nominal interest rate minus the inflation rate (e.g., 5% nominal − 3% inflation = 2% real return). Use our Inflation Calculator to see how purchasing power changes over your investment horizon.
Simple interest is typically used for short-term loans, auto loans, certain bonds, and some personal loans. Compound interest applies to savings accounts, money market accounts, CDs, mortgages, credit cards, and most investments. Always confirm with your lender or bank which method applies.
This calculator shows gross pre-tax interest. In the US, interest income is taxable as ordinary income in the year it is received. Use our Income Tax Calculator to estimate what portion you may owe, then subtract it from your interest earned to find your after-tax return.