Interest Calculator
Calculate simple and compound interest on savings or loans over any time period with flexible compounding options.
Input Parameters
Results
Compound vs Simple Interest
Compound interest earns interest on previously earned interest, resulting in exponential growth. Simple interest calculates interest only on the original principal. Compound interest is far more powerful for long-term savings.
What is the Interest Calculator?
The standard Interest Calculator calculates "Simple Interest". Unlike compound interest, simple interest only generates returns on the initial principal amount, making it a linear equation often used in short-term personal loans.
How It Works (Formula)
The formula is straightforward multiplication. It takes the starting principal ($P$), multiplies it by the annual interest rate ($r$), and multiplies that by the length of time in years ($t$).
$$ I = P \times r \times t $$
The linear equation for calculating simple, non-compounding interest.
How to Use It
Enter the initial amount borrowed or invested. Input the annual interest rate. Finally, enter the duration of the loan. The calculator will output the exact dollar amount of interest generated.