Free Interest Calculator
See how your money grows over time. Calculate both simple and compound interest to understand the potential of your savings or investments.
Last Updated: 15 Jan 2026
Investment Details
Watch your money grow
Calculate returns over time
What is an Interest Calculator?
An interest calculator is a financial tool that computes how money grows over time through interest. It calculates both simple interest (calculated only on the principal) and compound interest (calculated on principal plus accumulated interest), helping you understand the true power of time and interest rates on your savings or investments.
Interest calculators are essential for comparing savings accounts, investment options, loan costs, and understanding how compound interest can exponentially grow your wealth over decades. They help you make informed financial decisions by showing the long-term impact of different interest rates and compounding frequencies.
Why Use Our Free Interest Calculator?
Compare Interest Types
Compare simple vs compound interest side-by-side. See how compound interest dramatically outperforms simple interest over time.
Compounding Frequency
See how different compounding frequencies (daily, monthly, quarterly, annually) affect your returns. More frequent compounding means higher returns.
Financial Planning
Plan for savings goals, compare investment options, or understand loan interest costs. Make informed financial decisions with accurate calculations.
Common Use Cases for Interest Calculator
Savings & Investments
Savings Accounts
Compare different savings account interest rates. See how your money grows in high-yield savings vs traditional savings accounts.
Investment Growth
Project investment growth with compound interest. Understand how stocks, bonds, or mutual funds grow over time.
Retirement Planning
Calculate how retirement accounts grow with compound interest. Plan for long-term financial security and retirement goals.
Loan Analysis
Loan Interest Costs
Calculate total interest paid on loans. Compare simple interest loans vs compound interest loans to understand true borrowing costs.
Credit Card Debt
Understand how credit card interest compounds. See how debt grows if not paid off, emphasizing the importance of paying down balances.
Mortgage Planning
Calculate mortgage interest costs over the loan term. Understand how interest compounds on home loans and affects total payments.
The Power of Compound Interest
Einstein's "Eighth Wonder"
Albert Einstein reputedly called compound interest the "eighth wonder of the world." It allows your wealth to grow exponentially over time because you earn interest not just on your initial money, but on the interest you've already earned.
Example: $10,000 at 8% compound interest grows to $21,589 in 10 years, $46,610 in 20 years, and $100,627 in 30 years. The growth accelerates dramatically in later years!
Simple vs Compound Interest
Simple interest calculates only on principal: $10,000 at 8% = $800/year. Compound interest calculates on principal + accumulated interest, growing faster each year.
Compounding Frequency Impact
More frequent compounding (daily vs annually) increases returns. Daily compounding earns slightly more than monthly, which earns more than annual compounding.
Time is Your Best Friend
The longer your money compounds, the more dramatic the growth. Starting early and letting investments compound for decades creates the most wealth.
Interest Calculation Formulas
Simple Interest Formula
A = P(1 + rt)Where:
- • A = Final amount
- • P = Principal (initial amount)
- • r = Annual interest rate (as decimal)
- • t = Time in years
Example: $10,000 at 5% for 3 years = $10,000 × (1 + 0.05 × 3) = $11,500
Compound Interest Formula
A = P(1 + r/n)^(nt)Where:
- • A = Final amount
- • P = Principal
- • r = Annual interest rate
- • n = Compounding frequency per year
- • t = Time in years
Example: $10,000 at 8% compounded monthly for 10 years = $10,000 × (1 + 0.08/12)^(12×10) = $22,196
Frequently Asked Questions
What is the difference between simple and compound interest?
Simple interest is calculated only on the principal amount. Compound interest is calculated on the principal plus accumulated interest, meaning you earn 'interest on interest'. Compound interest grows much faster over time.
How does compounding frequency affect returns?
More frequent compounding (e.g., daily vs. annually) increases total returns because interest is added to the principal sooner, allowing it to start earning more interest immediately.
Can I use this for loan interest?
Yes! Use simple interest mode for basic loans, or compound mode for credit cards and other financial products to estimate total interest costs.
What's a realistic interest rate for savings?
High-yield savings accounts typically offer 4-5% annually (as of 2024-2025). Stock market investments historically return about 7-10% annually over the long term. Rates vary by institution and economic conditions.
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