Interest Calculator
Calculate simple or compound interest.
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Simple vs. Compound Interest
Simple interest: Interest = Principal × Rate × Time. $1,000 at 5% for 3 years = $150 total interest.
Compound interest: A = P(1 + r/n)^(nt). With monthly compounding, $1,000 at 5% for 3 years ≈ $1,161.62 — significantly more than simple interest.
Why Compounding Frequency Matters
The more frequently interest compounds, the higher the effective annual rate (EAR). Daily compounding slightly outperforms monthly, which outperforms annual. This is critical when comparing loans or savings accounts.
Rule of 72
Divide 72 by the annual interest rate to estimate how many years it takes to double your money. At 6% per year: 72 ÷ 6 = 12 years.
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Calculate your investment returns with the ROI Calculator. For quick % changes, use the Percentage Calculator.