Whether you're borrowing money or investing it, knowing exactly how much interest will accumulate is crucial. Use our calculator to instantly compare Simple Interest and Compound Interest for various frequencies and timeframes.
Simple Interest Formula
Compound Interest Formula
Frequently Asked Questions
Simple interest is calculated only on the initial principal amount. Compound interest is calculated on the initial principal AND the accumulated interest of previous periods. Compound interest makes your wealth grow much faster over time.
It dictates how often the generated interest is added back to your principal. It could be calculated Yearly (1 time), Half-Yearly (2 times), Quarterly (4 times), or Monthly (12 times a year).
The more frequently interest is compounded, the higher your returns. So for the same annual rate, Monthly compounding yields more final wealth than Yearly compounding.
Banks calculate rates "per annum" (yearly). In rural Indian loan markets (Mahajani system), interest is calculated "per month" (e.g., ₹2 per ₹100 per month). You can use our dedicated Mahajani Interest Calculator for that specific exact format.