Interest Calculator
One page for both kinds of interest: flip between simple and compound, choose the compounding frequency, and see the total value and the effective annual yield either way.
Both kinds of interest, one page
Simple interest grows in a straight line: the same amount every year. Compound interest grows in a curve: more every year than the year before. For a principal, a rate and a few years, this page computes either — and shows the effective annual yield so the two can be compared on one scale.
Simple: FV = P(1 + rt) · Compound: FV = P(1 + r ÷ m)mt
Example: $10,000 at 5% for 10 years. Simple: $15,000. Compound monthly: $16,470.09. The $1,470 gap is the price of misunderstanding one word in a contract — over 30 years the same misunderstanding costs more than the original principal.
Which regime is your money in?
Savings accounts and investments compound. Many short-term and penalty calculations are simple. Carrying balances on revolving credit compound daily in effect. If a document says 'interest' without a regime, the safer assumption for money you owe is the compounding one — and the document deserves a second read.
How this is calculated
Simple mode: interest = P × rate × years. Compound mode: the nominal rate is divided by your chosen frequency and applied period by period with no contributions — future value = P(1 + r/m)^(m×years). The effective annual yield shown is the APY of the compounding setup (in simple mode it equals the rate itself, since nothing compounds within the year).
Frequently asked questions
What compounding frequency should I choose?
The one your account or contract uses: savings typically daily or monthly, many bonds semiannually, some loans monthly. When unknown, monthly is the conventional middle.
Why does the effective yield exceed the rate in compound mode?
Because interest credited inside the year starts earning its own interest. A 5% nominal rate compounded monthly yields 5.12% effectively — the APY calculator isolates exactly this conversion.
Can this page add regular deposits?
No — by design it isolates the interest mechanism on a single sum. The compound interest and savings calculators add contributions.
Is a 0% mode difference real at short times?
Nearly: under a year, simple and compound barely diverge, which is why short-term practice uses simple interest without meaningful error.
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