Interest Calculator
Simple and compound interest growth on principal over time.
Use one currency throughout. Results are in the same currency as your inputs.
Future value (compound)
Simple interest (comparison)
How this interest calculator works
Interest is the cost of borrowing — or the reward for saving — expressed as a rate over time. This calculator compares two common models side by side: compound interest (interest earns interest) and simple interest (interest only on the original principal).
Compound vs simple
Compound interest uses A = P(1 + r/n)nt, where P is principal, r is the annual rate as a decimal, n is compounding periods per year, and t is years. The more frequently interest compounds, the higher the future value for the same stated annual rate.
Simple interest grows linearly: interest = P × annual rate × years. Banks rarely use pure simple interest for long-term savings, but it is a useful baseline and appears in some short-term loans or teaching examples.
Worked example (dollars)
$10,000 at 5% for 10 years, compounded monthly, grows to roughly $16,470. The same principal under simple interest earns $5,000 of interest ($15,000 total). The gap is the effect of compounding — small at first, larger over longer horizons.
Illustrative UK / Europe example (£)
Illustrative planning example only — not a savings-product recommendation. Rates and compounding schedules vary by account; tax treatment (for example UK ISA wrappers) is not modeled here.
Enter £10,000 principal, 4% annual rate, 10 years, and monthly compounding. Compare the compound future value with the simple-interest line on this page. Then change compounding to annually and note how the compound result moves — frequency matters, but less than rate and time for most consumer rates.
| Model | What the page shows | Takeaway |
|---|---|---|
| Compound, monthly | Higher ending balance | Interest earns interest within the year |
| Compound, annually | Slightly lower than monthly | Same nominal rate; fewer compoundings |
| Simple interest | Linear baseline | Ignores interest-on-interest |
How to use it
- Enter the starting principal (any currency — the math is the same).
- Enter the annual interest rate as a percent.
- Enter the number of years.
- Choose how often interest compounds (for the compound result).
- Compare the compound future value with the simple-interest comparison line.
Decision checklist
- Match compounding — Use the schedule your account states, or compare monthly vs annual to see sensitivity.
- Read both lines — A large gap means time and compounding dominate; a small gap means short horizon or low rate.
- No deposits here — For regular monthly contributions, use the investment calculator.
- Nominal vs real — Inflation is not shown; long-horizon totals may buy less in today’s purchasing power.
Frequently asked questions
Which compounding frequency should I pick?
Match the account: many savings accounts compound daily or monthly; some bonds use semi-annual. If unsure, monthly is a common planning default — then compare with annual compounding to see sensitivity.
Does this include regular deposits?
No. For ongoing contributions, use the investment calculator instead.
Can I use pounds?
Yes. Enter a £ principal and interpret the future value in pounds under the same rate assumptions.
Reading the two results together
The compound line is usually the realistic model for long-lived savings. The simple-interest line is the baseline that ignores interest-on-interest. When the gap is small, your horizon is short or the rate is low. When the gap is large, time and compounding dominate — which is also why high-APR debts become expensive if balances linger. For a fuller walkthrough with repeated examples, read compound vs simple interest.
Inflation is not shown here. A future value that looks impressive in nominal pounds or dollars may buy less in today’s purchasing power. Treat the output as a nominal estimate, then adjust expectations for prices if your planning horizon is measured in decades.
Limitations
Taxes, fees, and variable rates are ignored. Inflation is not modeled. Results are estimates only and are not financial advice.
Results are estimates only and are not financial advice.