Interest Calculator Online Free - Simple and Compound

Simple and Compound Interest Calculator - how to use

Interest is the cost of money over time. When you invest, interest represents the return on invested capital. When you take out a loan, it is the additional cost you pay beyond the amount received. Understanding how interest works is essential for making better financial decisions - whether comparing investments, evaluating loan installments or calculating savings growth.

Simple interest applies only to the initial capital in all periods. If you invest $1,000 at 1% per month for 12 months, you receive $10 in interest per month, totaling $120 in a year. Compound interest ("interest on interest") applies to the accumulated balance, including previous interest. In the same example, at the end of 12 months you would have $1,126.83 - and the difference grows exponentially over time.

The period-by-period table shows exactly how much is earned each cycle and the accumulated balance. This is especially useful for visualizing the compound interest effect over the long term - one of the most important concepts in personal finance.

Tip: when comparing rates, always convert to the same frequency. An annual rate of 12% is approximately 0.949% per month in compound interest (not exactly 1% per month). Use this calculator to simulate and compare different scenarios before making your financial decision.