Free Interest Calculator – Simple & Compound Interest Calculator

A Simple interest only earns on your original principal. Compound interest earns on both principal and previously earned interest. On this tool, toggle between the two modes to see the gap. A $10,000 investment at 5% over 10 years earns $5,000 simple or $6,289 compound with monthly compounding. That's a $1,289 difference just from reinvesting earnings.

A Enter it as a percentage. Type 5 for five percent, not 0.05. The calculator handles the conversion internally. If you're comparing two accounts — one at 3.5% and another at 4.2% — just punch those numbers in directly. Saves you from manual math errors.

A Not directly, but you can work around it. Take your expected return of 6% and subtract an assumed inflation rate of 3%. Enter 3% as your rate instead. That gives you your real return after inflation. On $10,000 over 20 years compounding monthly, you'd see about $8,200 real gain versus $33,000 nominal. The difference is stark—inflation eats more than you'd think at longer timeframes.

A It works for mortgages too, but with a limitation. Enter the loan amount, rate, and term to see total interest. On a $300,000 mortgage at 6.5% over 30 years, you'd see roughly $383,000 in interest. That doesn't include property taxes or insurance. For amortization schedules with monthly principal breakdowns, you'll want a dedicated mortgage calculator. Still, this tool gives you the big-picture interest cost fast.

A Let's test it right now. Enter $5,000 at 4% for 3 years. Switch from annual to monthly to daily compounding. You'll see total interest jump from about $624 to $636 to $637. The gains shrink as frequency increases because interest has less time to earn its own interest within each compounding period. For most savings accounts, monthly versus daily barely moves the needle. But going from annual to monthly adds roughly $12 on this example. Play with the toggles yourself—the tool makes the comparison obvious.

A The tool will still calculate, but you'll see the balance shrink over time. Negative rates show up in some European government bonds and occasionally in high-inflation scenarios. Enter -2% on $10,000 over 5 years with monthly compounding, and you'll get roughly $9,048 back. That's a loss of about $952. Most retail savings accounts won't hit negative rates, but the math works if you need to model a deflationary scenario. One catch: the simple interest mode handles negatives fine, too, so don't worry about errors.

A Yes, it works well for both, but adjust your inputs based on the account type. For a high-yield savings account, use the APY as your rate and pick daily compounding since most banks apply interest daily. A $15,000 deposit at 4.5% APY over 18 months with daily compounding gives you about $1,040 in interest. For a CD, use the stated rate and match the compounding frequency to what the bank offers, often monthly or quarterly. One thing to watch: the tool assumes the rate stays flat, so it won't model promotional teaser rates that expire after six months. Lock in your numbers manually if your bank changes rates mid-term.

A For savings goals, sure. Say you set aside $300 a month and want to know what it grows to. Enter $3,600 as principal at 4% for one year with monthly compounding, and you'll see roughly $3,673. But that assumes a lump sum sitting still. For true monthly deposits, add each contribution manually or use a dedicated savings goal tool. Still handy for quick what-if checks before you commit to a budget line.

A The calculator displays gross earnings without deductions. If you earn $500 in interest on a certificate of deposit, the output shows the full $500. Banks send Form 1099-INT for totals over $10, so remember that the government takes a cut. You'll need to manually subtract your tax bracket percentage from the final result. A quick tip is to lower your input rate by your expected tax rate to see net returns.

A You're likely forgetting to account for fractional periods or exact day counts. If you calculate $10,000 at 5% for six months by hand, multiplying 10000 by 0.05 and dividing by two gives $250. But monthly compounding adds interest every 30 days, which snowballs the total slightly. This calculator uses exact daily formulas under the hood to ensure precision down to the penny. Try switching the mode to simple interest to see if your manual math matches up.