Professional interest calculator for both simple and compound interest calculations. Calculate earnings on savings, investment returns, or loan interest costs. Trusted by investors and financial planners for precise interest calculations.
Interest Calculation Settings
Configure your interest calculation parameters
Interest Calculation Results
Your calculated interest and final amount
How to Use This Calculator
Master your interest calculations with our comprehensive guide and professional insights.
Frequently Asked Questions
What is the difference between simple and compound interest?
Simple interest is calculated only on the principal amount and grows linearly. Compound interest is calculated on both the principal and accumulated interest, leading to exponential growth. For example, $1,000 at 10% simple interest earns $100/year, while compound interest earns more each year as interest builds on interest.
How does compounding frequency affect my returns?
More frequent compounding leads to higher returns. Daily compounding earns more than monthly, which earns more than annual compounding. The difference becomes more significant with higher interest rates and longer time periods. This is why APY (Annual Percentage Yield) is often higher than the stated APR.
What is the Rule of 72?
The Rule of 72 is a quick way to estimate how long it takes for money to double. Divide 72 by the interest rate to get the approximate years. At 6% interest, money doubles in about 12 years (72/6=12). This works best for rates between 6-10%.
Should I consider inflation when calculating interest?
Yes, inflation affects the real value of your returns. If you earn 5% interest but inflation is 3%, your real return is only about 2%. For long-term planning, consider using real (inflation-adjusted) interest rates to understand your actual purchasing power growth.
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