Interest Calculator
Simple interest, compound interest and loan payments
Interest Calculator: Calculate Simple, Compound & Loan Interest Easily
Our free online Interest Calculator helps you quickly calculate simple interest, compound interest, loan payments, savings growth and investment returns with accurate real-time results. Whether you are planning personal savings, calculating bank loan interest, comparing investment options or understanding compound growth, this calculator gives you detailed financial insights instantly.
Quick answer: simple interest is principal × rate × time. $1,000 at 5% for 5 years earns $250.00 in simple interest, or about $283.36 with monthly compounding. Choose a tab above, enter your principal, rate and time, and the calculator shows the total amount, total interest, effective annual rate and a chart.
What Is Interest?
Interest is the cost of borrowing money, or the reward for saving or investing it. It is usually expressed as a percentage of the original amount, called the principal. When you borrow, you pay interest as a fee for using the lender's money. When you save or invest, you earn interest for letting a bank or institution use yours. Interest plays a major role in savings accounts, loans, credit cards, mortgages and retirement planning.
Simple Interest vs Compound Interest
Simple interest is calculated only on the original principal, so the interest is the same every year. It is common for short-term loans and basic calculations. Compound interest is calculated on the principal and the interest already earned, which creates exponential growth. It is used in savings accounts, investments and retirement funds.
This table compares $1,000 at 5% over different periods:
| Time | Simple interest | Simple total | Compound interest (monthly) | Compound total |
|---|---|---|---|---|
| 1 year | $50.00 | $1,050.00 | $51.16 | $1,051.16 |
| 5 years | $250.00 | $1,250.00 | $283.36 | $1,283.36 |
| 10 years | $500.00 | $1,500.00 | $647.01 | $1,647.01 |
| 20 years | $1,000.00 | $2,000.00 | $1,712.64 | $2,712.64 |
How Compounding Frequency Affects Growth
The more often interest is added, the more it earns. $1,000 at 5% for 10 years grows to $1,628.89 with annual compounding, $1,643.62 quarterly, $1,647.01 monthly and $1,648.66 daily. The gain from more frequent compounding is small compared with the effect of the rate and the length of time. The effective annual rate shows the true yearly return after compounding, so it is the best number for comparing accounts.
Loan Payments and Interest
On the Loan tab, the calculator works out your monthly payment, total repayment and total interest. A $20,000 loan at 7% over 5 years has a payment of about $396.02 and costs about $3,761.44 in interest. Early payments are mostly interest, and you can see the first and final year interest in the results. For a full breakdown of every payment, use the amortization calculator, and for specific loans try the loan calculator, the mortgage calculator or the auto loan calculator.
Rule of 72 and Savings Goals
The Rule of 72 gives a quick estimate of how long money takes to double: divide 72 by the annual rate. At 6% that is about 12 years. To plan a goal, switch the Compound tab to Savings goal. For example, saving about $147.05 a month for 5 years at 5% reaches $10,000. To explore growth further, try the compound interest calculator, the savings calculator or the investment calculator.
Who Uses an Interest Calculator?
Students learning finance, investors planning long-term growth, bank customers comparing savings accounts, borrowers checking loan costs, home buyers estimating mortgage interest, business owners analyzing financing, financial advisors helping clients, retirees planning income and anyone comparing investment returns or loan options. Results are estimates for general information and are not financial advice, and your bank's figures may differ slightly.
How to Use This Interest Calculator
Select a calculation type
Choose Simple Interest, Compound Interest or Loan.
Enter the principal amount
The original amount you want to invest, save or borrow.
Enter the interest rate
Use the annual percentage rate from your bank, lender or investment.
Enter the time period
Choose the number of years.
Choose the compound frequency
On the Compound tab, pick daily, monthly, quarterly, semi-annual or annual.
Add a monthly deposit (optional)
On the Compound tab, add regular deposits or switch to Savings goal.
Click "Calculate Interest"
See the total amount, total interest, monthly figure, effective rate and chart.