Interest Calculator

See what a savings pot or investment actually grows to — and how much of that is simple interest versus compounding.

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What it does

The Interest Calculator shows what a sum of money earns as simple interest (rate applied only to the starting amount) and as compound interest (rate applied each year to the running total including previous interest). Seeing both next to each other is the point — the difference is small in year one and gets dramatic somewhere between year five and year twenty, which is where most savings and investment decisions live.

How to use it

  1. Select your calculation mode: Simple Interest or Compound Interest.
  2. Enter the principal amount — the starting sum of money.
  3. Enter the annual interest rate as a percentage.
  4. Set the time period in years (decimals like 2.5 are supported).
  5. View the interest earned and total amount. Switch modes to compare simple vs compound returns.

Key features

Why it helps

Reach for this when comparing savings accounts (which one really pays more?), sanity-checking a broker's projection, or explaining to yourself why starting a pension at 25 is not the same as starting one at 45. Real banks often compound monthly or daily rather than annually, so treat the compound figure here as a slight underestimate of a real savings account and a slight overestimate of a real simple-interest loan.

Frequently asked questions

What's the difference between simple and compound interest?

Simple = on principal only. Compound = on principal plus earned interest, resulting in faster growth.

How often is compound interest calculated?

Annually in this calculator. Banks may compound monthly or daily for slightly higher returns.

Can I calculate for partial years?

Yes, use decimals like 2.5 for two and a half years.

Which is better?

For savings, compound earns more. For loans, simple costs less.

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