Compound Interest Calculator
Grow a balance with regular contributions and any compounding frequency.
Compare simple and compound interest on the same figures side by side.
| Year | Simple balance | Compound balance | Difference |
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Compound balance
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The Interest Calculator shows simple and compound interest on the same figures side by side. Simple interest is charged on the original amount only; compound interest is charged on the balance including interest already added, so the two diverge — slowly at first, then decisively.
Enter a principal, a rate and a period to see the interest under both methods at once. Simple interest is charged on the original amount only; compound interest is charged on the balance including interest already added, so the two diverge over time.
Seeing them side by side makes the gap concrete. Over a year or two the difference is minor. Over ten or twenty years it becomes the dominant term, which is why compounding is the more important idea in both saving and borrowing. The frequency control shows the second effect: at the same nominal rate, monthly compounding beats annual, and daily beats monthly, though the gains shrink quickly as frequency rises.
The two are calculated on the same figures, which is the only way to see how far apart they really run.
Over a year or two the difference is minor; over ten or twenty years it becomes the dominant term.
At the same nominal rate monthly beats annual and daily beats monthly, though the gains shrink quickly as frequency rises.
The same arithmetic applies whether the interest is being paid to you or by you.
Interest and final balance are reported for each method rather than a single blended figure.
The starting amount, whether it is a deposit you are making or a balance you owe.
Enter the annual rate and how long the money is invested or borrowed for.
Pick how often interest is compounded — annually, quarterly, monthly or daily.
The simple and compound totals are shown together, with the gap between them highlighted.
Simple interest is always calculated on the original principal. Compound interest is calculated on the principal plus any interest already earned, so the balance grows faster each period.
Some, with diminishing returns. Moving from annual to monthly compounding gives a noticeable lift, but monthly to daily adds very little. The effect is larger at higher rates.
The nominal rate is the headline annual figure. The effective annual rate accounts for compounding within the year, so 12 percent compounded monthly has an effective rate of about 12.68 percent.
Most savings accounts and nearly all long-term loans compound. Simple interest appears mainly in short-term lending and some fixed-term instruments, so check the terms rather than assuming.
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