Interest Calculator
Calculate simple or compound interest on any deposit or investment, see how much it will be worth over time, and view a full year-by-year or month-by-month growth schedule.
| Principal Amount | ā¹ 1,00,000 |
| Total Contributions | ā¹ 0 |
| Total Interest Earned | ā¹ 1,22,462 |
| Maturity Value | ā¹ 2,22,462 |
| Year | Deposits | Interest Earned | Ending Balance |
|---|
What Is an Interest Calculator?
An interest calculator works out how much a sum of money will grow into over a chosen period of time, given an interest rate. It can handle two very different kinds of growth: simple interest, which pays interest only on the amount you originally put in, and compound interest, which pays interest on the principal and on the interest that has already accumulated. This tool lets you switch between the two, choose how often interest compounds, add optional monthly contributions, and see the exact year-by-year or month-by-month breakdown of how your balance grows.
Simple Interest vs Compound Interest
With simple interest, the interest earned each period is always calculated on the original principal, so growth is a straight line. With compound interest, every bit of interest you earn gets added back to the balance, and the next round of interest is calculated on that larger balance too - so growth curves upward over time. Over short periods the two look similar, but the gap widens the longer the money is left invested.
The Compound Interest Formula
A = final amount, P = principal, r = annual rate (decimal), n = compounding periods per year, t = time in years
The total interest earned is simply the final amount minus the principal you started with, i.e. Interest = A ā P. When regular monthly contributions are included, each deposit is treated as its own smaller investment that starts compounding from the month it is added, and all of those amounts are added together to get the final balance.
The Simple Interest Formula
I = interest earned, P = principal, r = annual rate (decimal), t = time in years
Here the total amount is just Principal + Interest, since none of the interest is reinvested to earn further interest.
How Compounding Frequency Changes the Result
For the same nominal annual rate, compounding more frequently produces a slightly higher effective return, because interest is credited - and starts earning its own interest - sooner. The table below shows how ā¹1,00,000 at an 8% annual rate grows over 10 years under different compounding frequencies.
| Compounding | Periods/Year | Value After 10 Years |
|---|---|---|
| Annually | 1 | ā¹ 2,15,892 |
| Semi-Annually | 2 | ā¹ 2,19,112 |
| Quarterly | 4 | ā¹ 2,20,804 |
| Monthly | 12 | ā¹ 2,21,964 |
| Daily | 365 | ā¹ 2,22,535 |
How to Use This Calculator
- Enter the principal amount you are starting with.
- Enter the annual interest rate as a percentage.
- Choose Simple or Compound interest.
- If you chose Compound, pick how often it compounds (annually, monthly, daily, etc).
- Enter the time period in years or months.
- Optionally add a fixed amount you plan to deposit every month.
- Click Calculate to see the maturity value, total interest, chart, and full growth schedule.
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, so your balance grows faster over time with compounding.
How does compounding frequency affect my returns?
The more frequently interest compounds - daily versus annually, for example - the faster your balance grows, because interest is added to the principal more often and starts earning its own interest sooner.
Do regular contributions make a big difference?
Yes. Adding a fixed amount every month on top of your initial investment can significantly increase your end balance, since each contribution also has time to earn compound interest.
Is a higher interest rate always better?
Generally yes for savings and investments, since a higher rate grows your balance faster, but it's important to also consider the risk, taxes, and fees associated with the higher-yielding option.
Is this interest calculator free to use?
Yes, this calculator is completely free, requires no sign-up, and can be used as many times as you need.