Simple & Compound Interest Calculator
Calculate simple interest and compound interest in one place. Choose your compounding frequency and see a year-wise growth table. Free, no signup, and it runs in your browser.
| Year | Opening Balance | Interest Earned | Closing Balance |
|---|
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What Are Simple and Compound Interest?
Simple interest is earned only on the original amount, while compound interest is earned on the amount plus the interest already added. This calculator handles both, lets you choose yearly, half-yearly, quarterly or monthly compounding, and shows a year-wise growth table. It is useful for deposits, loans, school problems and everyday money questions.
How to Calculate Simple and Compound Interest Online
- Enter the principal amount, which is the money you invest or borrow.
- Enter the annual interest rate and the time period.
- Choose simple interest or compound interest.
- For compound interest, pick how often interest is added: yearly, half-yearly, quarterly or monthly.
- Click calculate to see the total interest, the final amount and the year-wise growth table.
About This Interest Calculator
Interest is the extra money you earn on an investment or pay on a loan. It is calculated in two main ways. Simple interest is worked out only on the original principal. Compound interest is worked out on the principal plus the interest already added, so your money grows faster over time.
This calculator handles both. It shows the interest earned, the final amount, and how your balance grows year by year, so you can see the effect of compounding clearly.
It is useful for students solving maths problems, shopkeepers and lenders working out interest on money, and anyone comparing deposits, savings or loans.
Simple and Compound Interest Formulas
| Type | Formula | Where |
|---|---|---|
| Simple interest | SI = (P × R × T) ÷ 100 Amount = P + SI |
P = principal, R = annual rate in %, T = time in years |
| Compound interest | A = P × (1 + r ÷ n)n × t CI = A − P |
r = annual rate as a decimal (8% = 0.08), n = times interest is added per year, t = time in years |
| Effective annual rate | EAR = (1 + r ÷ n)n − 1 | The real yearly return after compounding |
Example 1: Simple Interest
Principal ₹1,00,000, rate 8% a year, time 5 years.
| Item | Value |
|---|---|
| Simple interest (1,00,000 × 8 × 5 ÷ 100) | ₹40,000 |
| Final amount | ₹1,40,000 |
With simple interest you earn the same ₹8,000 every year.
Example 2: Compounding Frequency Comparison
Principal ₹1,00,000, rate 8% a year, time 5 years. The more often interest is added, the more you earn.
| Type | Times per year (n) | Effective annual rate | Final amount | Interest earned |
|---|---|---|---|---|
| Simple interest | Not applicable | 8.00% (on principal only) | ₹1,40,000 | ₹40,000 |
| Compounded yearly | 1 | 8.00% | ₹1,46,933 | ₹46,933 |
| Compounded half-yearly | 2 | 8.16% | ₹1,48,024 | ₹48,024 |
| Compounded quarterly | 4 | 8.24% | ₹1,48,595 | ₹48,595 |
| Compounded monthly | 12 | 8.30% | ₹1,48,985 | ₹48,985 |
Amounts are rounded to the nearest rupee.
Example 3: Year-wise Growth Table
Principal ₹1,00,000, rate 8% a year, compounded yearly for 5 years.
| Year | Opening balance | Interest earned | Closing balance |
|---|---|---|---|
| 1 | ₹1,00,000 | ₹8,000 | ₹1,08,000 |
| 2 | ₹1,08,000 | ₹8,640 | ₹1,16,640 |
| 3 | ₹1,16,640 | ₹9,331 | ₹1,25,971 |
| 4 | ₹1,25,971 | ₹10,078 | ₹1,36,049 |
| 5 | ₹1,36,049 | ₹10,884 | ₹1,46,933 |
Each year's interest is bigger than the last because it is earned on a larger balance.
Simple vs Compound Interest
| Point | Simple interest | Compound interest |
|---|---|---|
| Calculated on | Original principal only | Principal plus interest already earned |
| Growth | Steady and linear | Accelerating and exponential |
| Interest each year | Same every year | Increases every year |
| Best for | Short-term loans, quick calculations, school problems | Long-term savings and investments |
| Common examples | Flat-rate loans, informal lending | Fixed deposits, recurring deposits, PPF, credit card dues |
How Much Difference Does Compounding Make?
Principal ₹1,00,000 at 8% a year, compounded yearly. Amounts include the principal.
| Time | Simple interest amount | Compound interest amount |
|---|---|---|
| 10 years | ₹1,80,000 | ₹2,15,892 |
| 20 years | ₹2,60,000 | ₹4,66,096 |
| 30 years | ₹3,40,000 | ₹10,06,266 |
The gap is small at first and becomes huge over long periods. This is why starting early matters.
Rule of 72: How Long to Double Your Money
Divide 72 by the annual interest rate to estimate the years needed to double your money with compound interest. It is an approximation, not an exact figure.
| Annual rate | Approx. years to double |
|---|---|
| 6% | 12 years |
| 8% | 9 years |
| 10% | 7.2 years |
| 12% | 6 years |
Features
- Simple and compound in one tool: Switch between both and compare the results.
- Compounding frequency: Yearly, half-yearly, quarterly or monthly.
- Year-wise growth table: See the opening balance, interest earned and closing balance for every year.
- Clear results: Total interest and final amount at a glance.
- Private by design: The calculator runs in your browser using JavaScript, and your figures are not sent to our server.
Why Does Compounding Matter?
- Interest on interest: Your earnings start earning too, so growth speeds up.
- Time matters most: The longer you stay invested, the bigger the effect.
- Frequency adds a little: Monthly compounding earns slightly more than yearly at the same rate.
- It works against borrowers too: Debts that compound, such as unpaid credit card dues, grow quickly.
Frequently Asked Questions
1. What is simple interest?
Simple interest is interest calculated only on the original principal. The formula is SI = (P × R × T) ÷ 100, where P is the principal, R is the yearly rate in percent and T is the time in years. For example, ₹1,00,000 at 8% for 5 years earns ₹40,000 in simple interest.
2. What is compound interest?
Compound interest is interest calculated on the principal plus the interest already added. The formula is A = P × (1 + r ÷ n)^(n × t), and the interest is A − P. Because interest earns interest, your money grows faster than with simple interest.
3. What is the difference between simple and compound interest?
Simple interest is earned only on the original principal, so it stays the same every year. Compound interest is earned on the principal plus past interest, so it grows every year. Over long periods, compound interest gives a much larger amount.
4. How does compounding frequency change the interest?
The more often interest is added, the more you earn. For ₹1,00,000 at 8% for 5 years, yearly compounding gives ₹46,933 in interest, quarterly gives ₹48,595 and monthly gives ₹48,985. The difference is small in the short term but grows with time.
5. Which compounding frequency do FDs, RDs and PPF use?
Bank fixed deposits and recurring deposits commonly compound quarterly, while PPF interest is credited once a year. Rules differ by bank and scheme, so check your bank's terms or the scheme details before relying on any calculation.
6. How do I calculate compound interest by hand?
Divide the annual rate by the number of times interest is added a year, then add 1. Raise that number to the power of the total number of compounding periods, multiply by the principal to get the final amount, and subtract the principal to get the interest. For ₹1,00,000 at 8% compounded yearly for 5 years, 1.08 to the power 5 gives 1.4693, so the amount is about ₹1,46,933.
7. What is the Rule of 72?
The Rule of 72 is a quick way to estimate how long money takes to double with compound interest. Divide 72 by the annual rate. At 8%, money doubles in about 9 years. It is an approximation, not an exact result.
8. Is interest income taxable?
Interest from bank fixed deposits and recurring deposits is generally taxable at your income tax slab rate, and TDS may apply. Interest on PPF is tax-free. Tax rules can change, so check the latest rules or use an income tax calculator for your case.
9. Does the calculator show year-wise growth?
Yes. The growth table shows the opening balance, interest earned and closing balance for each year, so you can see how your money builds up over time.
10. Is my data sent to your server?
No. The calculator runs in your browser, and your figures are not sent to our server.
11. Is this interest calculator free?
Yes. It is completely free, with no signup and no usage limits.
Results are estimates for planning. Actual interest depends on your bank's or lender's terms and rules. This is not financial advice. Please consult a qualified professional before deciding.