Interest Calculator
Work out simple or compound interest on a lump sum. Enter the principal, the annual rate and the time, choose how often the interest compounds, and see the interest earned, the final balance and the effective annual rate. Everything runs in this browser tab.
Figures
Result
Private by design. This page has no backend. Your figures are processed by JavaScript on your own device and never leave this page.
Simple versus compound interest
Simple interest is charged only on the original principal, so it
grows in a straight line: interest = principal x rate x time.
Compound interest is charged on the principal plus the
interest already added, so it grows faster the more often it compounds:
balance = principal x (1 + rate / n) ^ (n x time), where n is the number
of compounding periods in a year (1, 2, 4, 12 or 365 here).
The effective annual rate
Because compounding quietly adds extra growth, the headline annual rate understates
the real return. The effective annual rate is what a year of
compounding actually works out to: (1 + rate / n) ^ n - 1. At 5% a year
compounded monthly, for example, a year's growth is about 5.12%, not 5%.
Reading the answer
The headline figure is the interest earned over the whole time. Beside it are the final balance (principal plus interest), the principal you started with, and the effective annual rate. The rate is entered as a yearly percentage â enter 5 for 5%.
When to use which
Simple interest suits short-term loans and many bonds, where interest is not reinvested. Compound interest matches most savings accounts, credit cards and investments, where the interest itself earns interest.
How to use the Interest Calculator
- Enter the principal, annual rate and time period.
- Choose simple or compound interest and the compounding frequency.
- Read the interest earned and the final balance, plus the effective annual rate.
Frequently asked questions
What is the difference between simple and compound interest?
Simple interest is paid on the principal only; compound interest is paid on the principal plus the interest already earned.
How does compounding frequency affect the result?
More frequent compounding earns slightly more, and the effective annual rate shows by how much.
Can I use it for a loan as well as savings?
Yes. The same maths applies to any money that earns or accrues interest.