The Interest Calculator calculates both Simple Interest (SI) and Compound Interest (CI) with a year-by-year breakdown table, helping you understand how your money grows over time.
| Type | Formula | Best For |
|---|---|---|
| Simple Interest | P × R × T / 100 | Short term loans |
| Compound Interest | P × (1 + R/100)^T | Long term savings |
Compound interest is called the 8th wonder of the world by Albert Einstein. Your interest earns interest! The longer you invest, the more powerful compounding becomes. Starting early with small amounts beats starting late with large amounts.
Simple interest is calculated only on the original principal, while compound interest is calculated on the principal plus previously earned interest, leading to faster growth over time.
Compound interest grows your principal by the interest rate over each period, with each period building on the last. More frequent compounding produces a larger final amount.
For savings and investments, compound interest is better because it grows faster. For loans, simple interest costs you less. The calculator lets you compare both.