Interest Calculator
Calculate both simple and compound interest to understand the growth of your investments or the cost of a loan.
Understanding Interest
Interest is the cost of borrowing money, or conversely, the income earned from lending it. It's the fundamental concept behind most financial products, from savings accounts to loans. Understanding the two main types—simple and compound—is key to managing your finances.
Simple Interest
This is a straightforward calculation based only on the original principal amount. It's calculated once per period and does not get added back to the principal for future calculations.
Compound Interest
This is 'interest on interest.' The interest earned in each period is added to the principal, so the next period's interest is calculated on a larger base. This causes your savings or debt to grow at an accelerating rate.