Interest Calculator
Compound Interest (Total Amount) Calculator
Compound interest adds accrued interest back to the principal each period, so interest is ...
Read MoreSimple Interest Calculator
Simple interest is calculated only on the principal. With the principal, annual rate, and ...
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Interest questions come in two shapes. Either you know the balance and want to know what it becomes — that is compound interest — or you know the principal and rate and want the interest alone, which is simple interest. Choosing the wrong one changes the answer, not just the precision.
Use simple interest for instruments where interest never earns interest: promissory notes, flat-rate car finance, short-term lending between people. Use compound interest for deposits and savings accounts, where interest is credited to the balance and starts earning the next period.
Frequently Asked Questions
How large is the difference between simple and compound interest?
At 5 % over ten years, 1,000 grows to 1,500 with simple interest and to 1,629 with annual compounding — a 129 difference that comes entirely from interest earning interest.
Does more frequent compounding always pay more?
Yes, but with diminishing returns. At the same nominal rate, monthly compounding beats annual by about 0.05 percentage points a year at 5 %; daily compounding adds a few hundredths more.
What rate is the interest rate in the calculator?
A nominal annual rate. The calculator divides it by the compounding frequency you choose, so enter 5 for 5 % per year, not the monthly equivalent.
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Sources & last update
2026-10-19