Interest Calculator: Simple Interest, Compound Interest and Examples
Understand simple and compound interest formulas, compare examples, and estimate how a principal amount changes over time.
An Interest Calculator helps estimate the interest earned on savings or the interest charged on a principal amount. The result depends on the principal, annual rate, time, and whether interest is simple or compounded.
Simple Interest Formula
Simple interest is calculated only on the original principal.
Simple Interest = Principal ├Ч Rate ├Ч Time ├╖ 100
For example, тВ╣10,000 at 6% per year for 2 years earns тВ╣1,200 in simple interest. The total becomes тВ╣11,200 before any fees or taxes.
Compound Interest Formula
Compound interest is calculated on the principal plus interest already added.
Amount = Principal ├Ч (1 + Rate ├╖ 100)^Time
For annual compounding, тВ╣10,000 at 6% for 2 years becomes тВ╣11,236. The interest is тВ╣1,236. More frequent compounding can produce a different result.
How to Use the Calculator
- Enter the starting principal.
- Enter the annual interest rate as a percentage.
- Enter the duration.
- Select simple or compound interest if the calculator offers that choice.
- Compare total amount and interest.
What Changes the Result?
A higher rate, larger principal, or longer duration generally increases the amount earned. With compounding, time has an especially important effect because earlier interest can earn additional interest.
Interest Earned vs Investment Return
Interest is often specified in a deposit or loan agreement. Investment returns may vary and can be negative; a fixed assumed rate should not be treated as a guaranteed return.
Before You Decide
Check whether the quoted rate is annual, how often compounding occurs, whether taxes or fees apply, and whether early withdrawal changes the return. Calculator results are estimates and may not match a provider's official statement exactly.
Explore More on Calcusite AI
Use the relevant calculator on Calcusite AI to test different values and compare scenarios. Results are estimates based on the inputs and assumptions you provide.