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Interest Calculator

Compute simple and compound interest earned on a principal amount.

Inputs

Total Amount
$12,833.59
Principal $10,000.00 + interest $2,833.59
Interest Earned
$2,833.59
Return on Principal
28.34%

How It Works

Compound interest reinvests each period's interest: A = P × (1 + r/n)^(n·t), where n is the number of compounding periods per year.

What is the Interest Calculator?

An interest calculator is a free online tool that computes simple and compound interest earned on a principal amount over time. Use it to estimate the growth of a savings deposit, certificate of deposit (CD), bond, or any interest-bearing account.

Interest Calculator formula

Simple interest is I = P × r × t, where P is principal, r is the annual interest rate, and t is the time in years. Compound interest uses A = P × (1 + r/n)^(n × t), where n is the number of compounding periods per year, and total interest = A − P.

How to use the Interest calculator

  1. 1Enter the principal amount you're depositing or investing.
  2. 2Enter the annual interest rate as a percentage.
  3. 3Enter the time period in years.
  4. 4Choose the compounding frequency (annually, quarterly, monthly, or daily).
  5. 5Compare the simple-interest and compound-interest results side by side.

Example calculation

$10,000 invested at 5% annual interest compounded monthly for 10 years grows to $16,470.09 — earning $6,470.09 in compound interest. The same deposit with simple interest would earn only $5,000.

Frequently asked questions

What is the difference between simple and compound interest?
Simple interest is calculated only on the original principal, while compound interest is calculated on the principal plus any interest already earned. Over time, compounding produces significantly more growth, especially with frequent compounding periods.
How much will $10,000 be worth in 20 years at 5%?
$10,000 invested at 5% compounded monthly for 20 years grows to $27,126.40 — earning $17,126.40 in interest. Compounded annually, the same deposit grows to $26,532.98.
How is savings account interest calculated?
Most savings accounts use daily compounding: A = P × (1 + r/365)^(365 × t). The annual percentage yield (APY) accounts for this compounding, so a 4.50% APY already includes the effect of daily compounding on the stated rate.
Is interest on a savings account taxable?
Yes — interest earned in a savings account, CD, or money market fund is taxed as ordinary income at the federal level, and usually at the state level too. The bank issues a Form 1099-INT for interest over $10 in a calendar year.

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