Whether you’re saving for retirement or investing for growth, understanding compound interest is your most powerful wealth-building tool. Our Interest Calculator shows how your money grows over time with different compounding frequencies.
Interest Calculator
Calculate compound or simple interest growth on your investments or savings.
How the Interest Calculator Works
We calculate both simple and compound interest:
Simple Interest: A = P(1 + rt)
Compound Interest: A = P(1 + r/n)^(nt)
Where P = principal, r = annual rate, n = compounds per year, t = years.
Example: $10,000 at 7% compounded monthly for 10 years = $20,096. That’s over $10,000 in free money from compounding!
💡 Next Decision
If you want to understand compound growth: Use our Compound Interest Calculator to see how your money grows over time with compounding.
If you are planning a savings target: Use our Savings Goal Calculator to work out how much to save each month.
If you want to compare borrowing costs: Use our Loan Calculator to see the total cost of a loan.
Frequently Asked Questions
What’s the difference between simple and compound interest?
Simple interest is calculated only on the principal. Compound interest earns interest on previously earned interest — this is where exponential growth happens.
What compounding frequency is best?
More frequent compounding (daily vs yearly) leads to higher returns. However, the difference between monthly and daily compounding is typically small.
Pro Tips
- Start early — the earlier you invest, the more time compound interest has to work
- Use the “monthly contribution” field to see the impact of regular investing
- The effective annual rate (APY) tells you the true annual return
Related Tools
- Use our Compound Interest Calculator to see the power of compounding
- Use our Savings Goal Calculator to plan your savings target
- Use our Loan Calculator to compare loan options
- Explore all our financial tools on the Personal Finance Hub