Calculate simple and compound interest for loans, savings, and investments
The Interest Calculator helps you determine how much interest will be earned or paid over time on a principal amount. It provides calculations for both simple interest and compound interest, which are fundamental concepts in finance used for loans, mortgages, savings accounts, investments, and more.
Simple interest is calculated only on the initial principal amount, regardless of the accumulated interest over previous periods. The formula for simple interest is:
I = P × r × t
Where:
Simple interest is often used for short-term loans, bonds, and some types of consumer loans.
Compound interest is calculated on both the initial principal and the accumulated interest from previous periods. The formula for compound interest is:
A = P × (1 + r/n)^(n×t)
Where:
For continuous compounding, the formula is:
A = P × e^(r×t)
Where e is the mathematical constant approximately equal to 2.71828.
Compound interest is commonly used for savings accounts, investments, and long-term loans like mortgages.
Interest calculations are estimates and actual results may vary. Financial institutions may use different methods to calculate interest, including day count conventions and varying compounding periods. This calculator assumes interest rates remain constant for the entire period, which may not reflect real-world conditions.