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Calculate interest earned or paid using simple or compound interest methods.
This calculator provides estimates only. Actual loan payments, APR, interest, fees, taxes and terms may vary by lender, country, credit profile and market conditions. Verify with a qualified financial professional or lender.
Simple: I = P×R×T. Compound: A = P(1+r/n)^(nt). Monthly compounding: n=12.
Result: Interest: $3,500, Total: $13,500 (Simple)
Compound interest earns more because you earn interest on previously earned interest.
Savings accounts: daily or monthly. Loans: monthly. Investments: varies.
Over 20 years at 7%, a $10,000 investment earns $28,638 with monthly compounding versus $14,000 with simple interest due to earning interest on accumulated interest.
More frequent compounding like daily yields slightly higher returns than monthly, but the difference diminishes after monthly and becomes negligible beyond daily compounding.
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