The Ultimate Interest Calculator
Interest is the fundamental cost of money. When you deposit money into a bank, the bank pays you interest for the privilege of using your capital. When you take out a loan, you pay the bank interest for the privilege of using theirs. Understanding how this mathematical penalty (or reward) is calculated is the foundation of personal finance.
Our advanced Interest Calculator allows you to instantly project the financial trajectory of both loans and investments, supporting both simple and compound mathematics.
Simple vs. Compound Interest
- Simple Interest: Calculated linearly. If you invest $100 at 5% simple interest, you earn exactly $5 every single year. The interest never accelerates.
- Compound Interest: Calculated exponentially. Your interest earns its own interest. That same $100 at 5% compound interest earns $5 in year one, but in year two, you earn 5% on $105, which accelerates your growth. Over decades, this snowball effect generates massive wealth. Use our tool to visualize the difference!