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Calculator Answers

Interest Calculator – Simple & Compound Interest

Blake Boege
Written by Blake Boege · Founder, Calculator Answers

An interest calculator is a financial calculation tool used to determine the amount of interest earned on savings or paid on a loan over time. It supports both simple interest, which is calculated strictly on the initial principal (I = P * r * t), and compound interest, where interest earned is added back to the principal, earning additional interest in subsequent periods. The calculator handles compounding frequencies ranging from daily to annual, as well as continuous compounding and optional recurring deposits, helping users model investment growth and loan repayment strategies.

Calculate simple and compound interest using our free, easy-to-use interest calculator. Toggle between compound growth and simple interest math.

See also: Simple Interest Calculator, Compound Interest Calculator, and Credit Card Interest Calculator.

Quick Answer

Calculate interest on savings, loans, or investments. Toggle between simple interest or compounding growth with customizable compounding frequencies.

Select Interest Type

Choose between simple interest or compounding growth

$

The amount you start with. · e.g. 10,000

%

Nominal annual rate. · e.g. 7

yr

e.g. 20

Compounding frequency

$

Added at the end of each month. · e.g. 100

Estimated future balance

Future balance after 20 years

$92,480.05

Contributed $34,000.00 · interest earned $58,480.05

Starting principal$10,000.00
Monthly contribution$100.00
Recurring contributions$24,000.00
Total contributions$34,000.00
Interest earned$58,480.05
Future balance$92,480.05
Effective monthly rate0.5833%
Total months240

Growth summary (first three + final year)

  • Year 1$11,962.16
  • Year 2$14,066.16
  • Year 3$16,322.27
  • Year 20$92,480.05

Estimate only. Real returns, taxes, fees, and contribution timing can change the final number.

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Examples

Simple Interest: $10,000 at 5% for 3 years

= $1,500 interest ($11,500 total)

Compound Interest: $10,000 at 7% for 20 years ($100/mo contribution)

≈ $85,620 balance ($51,620 interest earned)

How it works

How it works

Use this interest calculator to determine your returns or loan costs based on a specific interest rate. The tool supports two modes for calculating simple interest and compound growth:

  • Compound Interest Mode: Calculates the growth of principal over time with customizable compounding frequencies and optional monthly contributions, compounding interest onto previous interest.
  • Simple Interest Mode: Computes interest using the formula I = P × r × t, where interest is calculated only on the original principal.

Worked Examples

1. Compound Interest Example:

If you invest $10,000 at a 7% annual interest rate, compounded monthly, for 20 years, contributing an additional $100 per month:

  • Total principal contributed: $10,000 (starting) + $24,000 (monthly contributions) = $34,000
  • Future Balance: $85,619.64
  • Total Interest Earned: $51,619.64

2. Simple Interest Example:

If you borrow or invest $10,000 at a 5% simple annual interest rate for 3 years:

  • Interest (I) = Principal ($10,000) × Rate (0.05) × Time (3 years)
  • Interest Earned/Owed: $1,500
  • Total Value: $10,000 + $1,500 = $11,500

Specialized Interest Tools

For deep-dives into a specific method of calculating interest, try our dedicated tools:

Compound Interest CalculatorSimple Interest Calculator

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Simple Interest CalculatorCalculate simple interest using principal, rate, and time. See the interest earned or owed, total amount, and step by step work. Works as a simple interest calculator, interest calculator, principal rate time calculator, and reference for the simple interest formula. Useful for loan simple interest, savings simple interest, simple interest rate problems, and simple interest examples.Compound Interest CalculatorCalculate compound interest from starting principal, interest rate, compounding frequency, time, and optional monthly contribution. Estimate future balance, total contributions, and interest earned. Works as an interest calculator for investment growth, savings growth, future balance projection, and long-term planning.Credit Card Interest CalculatorEstimate how much interest you'll pay on a credit card balance. Enter your balance, APR, and monthly payment to see total interest, months to pay off, and how much of each payment goes to interest.Interest Only Loan CalculatorCalculate interest only payments on a loan in three modes: the monthly, biweekly, or weekly interest only payment; the total interest paid over an interest only period; or a side-by-side comparison of interest only vs amortizing payment. Works as an interest only loan calculator, interest only payment calculator, interest only mortgage calculator, interest only calculator, loan interest only calculator, interest only period calculator, interest only loan payment calculator, and reference for the interest only payment formula. Useful any time you need to calculate interest only payment amounts or see what a monthly interest only payment looks like before principal repayment starts.

Frequently asked questions

Simple interest is calculated solely on the principal (the initial amount of money). Compound interest is calculated on the principal plus any interest that has accumulated in previous periods, meaning you earn interest on your interest.

Compound interest works by adding earned interest back into the principal balance at regular intervals (such as monthly or annually). In the next period, the interest rate is applied to this new, larger balance, leading to exponential growth over time.

A higher compounding frequency is better for savers because interest is added to the balance more often, allowing compound interest to build faster. For example, daily compounding yields a slightly higher return than monthly or annual compounding at the same nominal interest rate.