ToolkitBook
Calculate how your money grows with this browser-based interest calculator. Compare simple and compound interest side by side to see which maximizes returns. Enter any principal amount, adjust rates by day, month, or year, and get instant results. Simple interest calculates earnings based only on your original principal—useful for short-term loans and certain bonds. Compound interest adds earned interest back to your principal, creating growth over time. Choose annual, monthly, or daily compounding frequencies to match your financial product.
| Bank Type | 1 Year | 2 Years | 3 Years | 5 Years |
|---|---|---|---|---|
| Major Banks (US) | 4.50% | 4.25% | 4.00% | 3.75% |
| Online Banks | 5.00% | 4.75% | 4.50% | 4.25% |
| Credit Unions | 4.75% | 4.50% | 4.25% | 4.00% |
* Rates are for reference only. Actual rates may vary by institution and market conditions.
This calculator helps you understand how money grows through simple and compound interest.
Simple interest calculates earnings based only on your original principal. The formula is: Interest = Principal × Rate × Time. If you deposit $10,000 at 5% annual interest for 3 years, you earn $1,500 in interest. Each year generates exactly $500, regardless of accumulated interest. Simple interest commonly applies to short-term personal loans, auto loans, and certain bonds. As a borrower, simple interest works in your favor since it produces lower total costs than compound interest.
Compound interest adds earned interest back to your principal, creating exponential growth. The formula is: Total = Principal × (1 + Rate/n)^(n×Time), where n is compounding periods per year. A $10,000 deposit at 5% compounded annually for 3 years yields $11,576.25—$76.25 more than simple interest. Compounding frequency matters: annual adds interest once per year, monthly divides the rate by 12 and compounds each month, daily compounds every day. More frequent compounding produces higher returns because interest starts earning interest sooner.
Principal: Your starting amount—the initial deposit, investment, or loan amount. Enter any positive number in your chosen currency.
Interest Rate: Enter the percentage as a number (5 for 5%, not 0.05). Select annual, monthly, or daily to match how your financial product quotes rates.
Term: Duration in years, months, or days. The calculator converts all terms appropriately for the chosen interest type.
Interest Type: Choose simple or compound based on your financial product. Savings accounts and CDs typically use compound interest. Personal loans and auto loans often use simple interest.
The calculator displays principal, interest earned, and total value. Interest earned shows pure profit for savings or cost for loans. Total value is your ending balance after the term. Use these figures to compare different rates and terms—a 0.5% rate difference on a $50,000 deposit over 10 years compounds into hundreds of dollars.
Compare savings accounts to see how rate differences affect earnings. Evaluate certificate of deposit terms—a 1-year CD at 4.5% versus a 5-year CD at 4.0% produces different total returns. Calculate loan costs by entering the loan amount as principal. Model retirement growth by entering current savings and expected annual return. A $100,000 portfolio at 7% annually for 30 years grows to over $760,000 through compound interest.