Finance Tools
Interest Calculator
Calculate simple and compound interest with monthly contributions. Compare interest types and see year-by-year growth breakdown.
Use Interest Calculator to get instant results without uploads or sign-ups. Everything runs securely in your browser for fast, reliable output.
Your results will appear here.
About this tool
Interest is money earned on savings or paid on loans. Simple interest calculates on principal only. Compound interest calculates on principal plus accumulated interest - "interest on interest" - causing exponential growth.
Compound interest is more common in savings accounts, investments, and most loans. Even small differences in rate or compounding frequency can make huge differences over time. Monthly contributions accelerate wealth building significantly.
Usage examples
Simple vs Compound
$10K at 5% for 10 years
Simple: $15,000 ($5K interest). Compound: $16,289 ($6,289 interest). Compound earns $1,289 more!
Power of Contributions
$10K + $200/month at 7% for 20 years
Without contributions: $38,697. With contributions: $115,414. Monthly contributions add $76,717 more!
College Savings
$5K + $100/month at 6% for 18 years
Total saved: $42,247 (principal: $26,600, interest: $15,647). Compound interest adds 59% growth.
How to use
- Enter "Principal Amount" (starting amount).
- Enter "Annual Interest Rate" (%).
- Enter "Time Period" (years).
- Optionally add "Monthly Contribution".
- Click "Calculate" to see simple vs compound interest.
Benefits
- Simple & compound interest
- Monthly contributions support
- Year-by-year breakdown
- Side-by-side comparison
- Interest vs principal chart
- Total growth visualization
FAQs
What is the difference between simple and compound interest?
Simple interest: I = P × r × t. Always calculated on original principal. $1,000 at 5% for 3 years = $150 interest ($50/year). Compound interest: A = P(1+r)^t. Calculated on principal + accumulated interest. Same $1,000 = $157.63 interest. Compound earns $7.63 more because Year 2-3 earn interest on Year 1 interest.
How often should interest compound for best returns?
More frequent = better. Annually: lowest returns. Monthly: better. Daily: even better. Continuous: theoretical maximum. Practical difference is small: $10K at 5% for 10 years → Annual: $16,289. Monthly: $16,470. Daily: $16,487. Focus on higher interest rate (much bigger impact) than compounding frequency.
How much should I save monthly to reach my goal?
Work backwards from goal. Want $100K in 10 years at 7%? Use formula: Monthly = (Goal - Principal × (1+r)^t) / ((1+r)^t - 1) × (r/12). Example: Starting with $10K → Need ~$580/month. Use our calculator with different monthly amounts to find what works for your budget.
What is a good interest rate for savings?
Context matters. Regular savings account: 0.01-0.5% (poor). High-yield savings: 4-5% (good, 2024 rates). CDs: 4-5.5%. Money market: 4-5%. S&P 500 average: ~10% (but volatile). Bonds: 3-5%. For long-term (10+ years), stocks usually win. For emergency fund, high-yield savings. Consider inflation (~3%) - earn below that = losing purchasing power.
How long to double money at different interest rates?
Use Rule of 72: Years to double ≈ 72 ÷ interest rate. At 6%: 72÷6 = 12 years. At 8%: 9 years. At 10%: 7.2 years. At 12%: 6 years. Actual formula: ln(2)/ln(1+r) gives exact answer, but Rule of 72 is quick mental math. Higher rates = exponentially faster growth, not linear.
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