Interest Calculator
Interest Rate Illustration

Interest Calculator

Calculate Simple and Compound Interest on your investments or loans.

Introduction

Welcome to the Interest Calculator! This tool helps you estimate the interest earned or paid on a principal amount over a specified period, using both Simple and Compound Interest methods.

How to Use

  1. Enter the principal amount (initial investment or loan).
  2. Enter the annual interest rate.
  3. Enter the time period in years (can be a decimal for partial years).
  4. Select the type of interest (Simple or Compound).
  5. Click "Calculate Interest" to see the interest earned or paid and total amount.
  6. Review the summary and notes in the result section.
  7. Click "Reset" to clear the form and start over.
  8. Click "Save Entries" to store your calculations locally.

Understanding Interest

Interest is the cost of borrowing money or the return on investment. This calculator supports two types:

  • Simple Interest: Calculated as Principal × Rate × Time. Interest is earned only on the initial amount.
  • Compound Interest: Calculated as Principal × (1 + Rate)^Time - Principal. Interest is earned on both the initial amount and accumulated interest (compounded annually in this tool).

These calculations assume a fixed interest rate and do not account for additional fees or variable rates.

FAQs

What is the difference between Simple and Compound Interest?

Simple Interest is calculated only on the principal amount, while Compound Interest is calculated on the principal plus any previously earned interest, leading to higher returns over time.

Does compounding frequency affect the result?

Yes, but this calculator assumes annual compounding for simplicity. More frequent compounding (e.g., monthly) would yield slightly higher interest.

How accurate is this calculation?

This is an estimate based on standard interest formulas. Actual interest may vary based on compounding frequency, fees, or rate changes.

About This Calculator

Built by xAI, this Interest Calculator provides a simple way to estimate interest for educational purposes. For precise figures, consult a financial advisor or institution.