Interest Calculator
Calculate simple and compound interest, plus the total maturity value, from a principal, rate, and time. Useful for gauging savings or loan interest.
Simple: P×r×t. Compound: P×(1+r/n)^(n×t). Pre-tax estimate.
Simple vs compound interest
Simple interest applies only to the principal: interest = P × r × t. Compound interest adds each period's interest back to the principal so it earns interest too: total = P × (1 + r/n)^(n×t). Here n is how many times per year interest is compounded. The longer the time, the larger the compounding effect.
The difference in numbers
- Simple: $10,000 at 8% per year for 3 years → interest $2,400, total $12,400.
- Compound (annual): $10,000 at 8% for 3 years ≈ $12,597.
- The more often it compounds (monthly > annual), the larger the result.
Where it helps
- Savings/deposits: estimate the maturity value.
- Loans: understand how interest builds up.
- Planning: compare simple vs compound and different terms.
Good to know
- Real products differ due to tax, promotional rates, and early-withdrawal terms.
- This is a pre-tax estimate. Confirm exact figures with your bank.
The amounts you enter are calculated in your browser and never sent to a server.
Read the Privacy Policy →Frequently asked questions
How is simple interest calculated?
Principal × rate × time. $10,000 at 8% for 3 years gives $10,000 × 0.08 × 3 = $2,400 interest and a $12,400 total.
What is the compound interest formula?
Total = P × (1 + r/n)^(n×t), where n is how many times per year interest compounds — annual is 1, quarterly 4, monthly 12.
Which is better, simple or compound?
For saving or investing, compound always earns more at the same rate and term. For borrowing, compound costs more.
Does compounding frequency matter?
Yes. With the same rate and term, more frequent compounding (monthly > quarterly > annual) yields a slightly higher total.
Does this match my bank exactly?
It's a pre-tax estimate. Real amounts depend on tax, promo rates, and compounding method, so check with your bank.