Interest Calculator
Calculate simple or compound interest on any principal. Enter the rate, term, and compounding frequency to see the interest earned and the final balance.
Calculator by Toolsloft ↗- Interest
- $161.47
- Final balance
- $1,161.47
Interest can be figured two ways, and the difference adds up over time. This calculator does both: simple interest on the original principal only, and compound interest that earns on prior interest too. Switch modes to see how the same rate and term produce different balances.
How this is calculated
Simple interest is principal x rate x time, where time is in years and rate is a percentage. Compound interest uses A = P x (1 + r/n)^(n x t), where n is the number of compounding periods per year, then interest is the final amount minus the principal. Both are the standard textbook formulas.
How to use
- Choose simple or compound interest.
- Enter the principal, annual interest rate, and term in years.
- For compound interest, set how many times per year it compounds, then read the interest and total.
Examples
- $1,000 at 5% simple for 3 years:
Interest $150, total $1,150 - $1,000 at 5% compounded monthly for 3 years:
Interest $161.47, total $1,161.47
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 any interest already added, so the balance grows faster over time.
- How does compounding frequency affect the result?
- More frequent compounding (monthly or daily instead of yearly) earns slightly more interest for the same annual rate, because interest is added and starts earning sooner.
- Does this handle deposits or withdrawals?
- No. This tool computes interest on a single lump sum. For regular contributions, use a compound interest or savings calculator that supports periodic deposits.