Interest Calculator
Discover how your principal investment grows over time with compound interest.
Interest Accumulation
Total Accumulated Value
$0.00
Simple vs Compound Interest Explained
Understanding how interest applies to your money is the bedrock of personal finance. Whether you are holding a savings account, investing in index funds, or borrowing money, the way interest is calculated can mean a difference of thousands of dollars. Our Interest Calculator allows you to rapidly simulate these financial scenarios.
Simple Interest
Simple interest is calculated exclusively on the original principal amount. If you invest $1,000 at a 5% simple interest rate for 3 years, you earn exactly $50 every year, for a total of $150. It does not grow exponentially.
Compound Interest
Compound interest, on the other hand, is the interest you earn on your original money plus the interest you've already accumulated. Over time, this creates a snowball effect that causes wealth to grow exponentially.
The Compound Frequency dictates how often that interest is calculated and added to the balance. The more frequent the compounding (e.g., Daily vs Annually), the faster the money grows.