Interest Calculator
Enter an amount, a rate and a time period to see the interest earned for every interest type side by side.
Free, no sign-upRuns in your browserHow we calculate
Years, months and days are added together (365-day year).
- Principal
- $10,000.00
- Interest
- $6,470.09
- Final amount
- $16,470.09
- Time
- 10 years
| Interest type | Interest | Final amount |
|---|---|---|
| Simple interest (no compounding) | $5,000.00 | $15,000.00 |
| Compounded annually (1/yr) | $6,288.95 | $16,288.95 |
| Compounded semiannually (2/yr) | $6,386.16 | $16,386.16 |
| Compounded quarterly (4/yr) | $6,436.19 | $16,436.19 |
| Compounded monthly (12/yr) | $6,470.09 | $16,470.09 |
| Compounded daily (365/yr) | $6,486.65 | $16,486.65 |
| Compounded continuously | $6,487.21 | $16,487.21 |
How this was calculated
- A = P × (1 + r/n)^(n × t) = 10,000.00 × (1 + 0.05/12)^(12 × 10) = 16,470.09
- Interest earned = final amount − principal = 16,470.09 − 10,000.00 = 6,470.09.
Educational estimate, not financial advice. Real accounts may compound or credit interest differently.
How this interest calculator works
An interest calculator tells you how much a sum of money earns, or costs, over a period of time at a given annual rate. The answer depends on one choice: whether the interest is simple or compounded. This interest calculator shows both, so you can see how much the choice matters for your numbers.
Simple interest is calculated only on the original principal: I = P × r × t. Interest never earns interest. Compound interest adds each period's interest to the balance before the next period is calculated: A = P × (1 + r/n)n×t, where n is the number of compounding periods per year. With continuous compounding the limit as n grows is A = P × er×t.
Worked example: $10,000 at 5% for 10 years
With simple interest you earn $10,000 × 0.05 × 10 = $5,000, for a final amount of $15,000. Compounded annually the same deposit grows to $16,288.95; compounded monthly to $16,470.09; compounded daily to $16,486.65. Continuous compounding reaches $16,487.21, the ceiling for a 5% nominal rate. The table under the result lists every type for your inputs, so you can see that moving from monthly to daily compounding adds only a few dollars, while compounding versus simple interest adds more than $1,200 over a decade.
Nominal rate versus effective yield
The rate you enter is the nominal annual rate. Because of compounding, the money actually grows faster: 5% compounded monthly is an effective annual yield of 5.116%. Banks quote this as APY (annual percentage yield) on savings products, so compare accounts on APY, not on the headline rate. The U.S. Consumer Financial Protection Bureau and SEC Investor.gov both explain the difference between simple and compound interest in their consumer guides.
Common mistakes
- Entering the rate as a decimal (0.05) instead of a percent (5).
- Comparing a simple-interest offer with a compound one without checking the compounding period.
- Forgetting that short periods count: 6 months is 0.5 years, 90 days is about 0.247 years.
- Assuming this covers regular deposits. For monthly contributions use the compound interest calculator.
Figures are a model of a fixed rate and no withdrawals, taxes or fees. Interest on savings is generally taxable income in the year it is credited.
Frequently asked questions
How do you calculate simple interest?
Simple interest = principal × annual rate × time in years. $10,000 at 5% for 10 years earns $10,000 × 0.05 × 10 = $5,000.
How do you calculate compound interest?
A = P × (1 + r/n)^(n×t), where n is the number of compounding periods per year. $10,000 at 5% compounded monthly for 10 years becomes $16,470.09.
What is the difference between simple and compound interest?
Simple interest is paid only on the original principal. Compound interest is also paid on interest already earned, so the balance grows faster the longer it runs.
How do I calculate interest for months or days?
Convert the period to years: months ÷ 12 or days ÷ 365. Six months is 0.5 years, so $10,000 at 5% simple interest earns $250.
Does daily compounding pay much more than monthly?
Only slightly. On $10,000 at 5% for 10 years, monthly compounding gives $16,470.09 and daily gives $16,486.65, a difference of $16.56.