📈 Calculator Tools

Compound & Simple Interest Calculator

See how an initial amount plus steady monthly contributions grows over time — switch between compound and simple interest and watch how much of the final balance is pure interest.

Investment details

Balance after 20 years

$167,072

You contributed

$58,000

Interest earned

$109,072

Growth by year

Contributions Growth
About this calculator

The math behind 'let your money work for you'

This tool calculates both compound and simple interest, so you can project savings and investments either way and see the difference side by side. Compound interest earns returns on your returns — the snowball that dominates over long periods — while simple interest is charged on the principal only. A toggle at the top switches between the two, and both handle a starting amount plus regular monthly contributions, splitting the final balance into what you put in versus what interest added.

The year-by-year chart makes the famous 'hockey stick' visible: in the early years contributions dwarf interest, but with compounding the growth portion eventually takes over and never looks back — a gap that simple interest never opens. Adjust the return rate to compare a savings account (2–4%), a bond-heavy portfolio (4–6%) and a long-run stock index assumption (7–10%), and flip to Simple to see exactly what interest-on-interest is worth over 20 years.

100% freeNo sign-upInstant resultsPrivate — runs locally
How to use it
  1. 1Choose Compound or Simple interest at the top — Compound for investments and savings that reinvest, Simple for the classic principal-only calculation.
  2. 2Enter your starting amount — even zero works if you are beginning from scratch.
  3. 3Set the monthly contribution you can commit to, then an expected annual rate (and, in Compound mode, how often it compounds).
  4. 4Read the results: final balance, total contributed, interest earned, and the year-by-year chart.
What it shows
  • Compound or simple interest — toggle to compare the two on identical inputs
  • Final balance for any timeframe up to 60 years
  • Contributions vs interest split — see what compounding actually added
  • Annual, quarterly, monthly or daily compounding (compound mode)
  • Year-by-year growth chart with contribution baseline
  • Instant recalculation as you drag the sliders
  • Works for savings accounts, index funds, loans, or any fixed-rate assumption

Frequently asked questions

What is the difference between simple and compound interest?
Simple interest is charged only on the original principal — a fixed amount each period (the formula is Interest = Principal × rate × time). Compound interest is charged on the principal plus all the interest already added, so it earns interest on interest and accelerates over time. On the same rate and term, compound always ends higher; this calculator lets you toggle between them to see the exact gap.
When is simple interest actually used?
Simple interest shows up on many car loans and other short-term instalment loans, some bonds and treasury bills, and short bridging loans — cases where interest is meant to accrue on the principal only. Long-term savings, investments, mortgages and credit cards use compounding. Use Simple mode when a product explicitly quotes simple interest, and Compound mode for anything that reinvests or capitalises.
What is compound interest in simple terms?
It is interest earned on interest. If $100 grows 10% to $110, next year's 10% applies to $110, not $100. Left alone, the growth accelerates every year — that is why starting early matters more than starting big.
How often should interest compound for the best result?
More frequent compounding grows slightly faster, but the difference between monthly and daily is small. The rate and the time horizon matter far more than the frequency.
What annual return should I assume?
High-yield savings accounts currently pay roughly 3–5%; diversified stock index funds have returned about 7–10% annually over long historical periods, before inflation. Use conservative and optimistic values to bracket your plan — and remember past returns never guarantee future ones.
Does this account for inflation or taxes?
No — results are nominal. A common approach is to subtract expected inflation (~2–3%) from your return assumption to see 'today's money' purchasing power. Taxes depend on your account type and country.
Is this financial advice?
No. It is an educational calculator that does the arithmetic transparently. For decisions about your own money, consult a qualified financial adviser.
Is my data stored anywhere?
No. Everything is computed in your browser with JavaScript; nothing is uploaded, saved or tracked.
📖

Full guide

Compound Interest Explained — The Math of Growing Money

The formula, the Rule of 72, and the three levers that decide how fast money grows.

The compounding formulaRule of 72 shortcutsTime vs rate vs contributions

Related Articles & Guides

BlogSimple Interest vs Compound Interest: The Difference in Real MoneyTwo accounts. Same $10,000. Same 8% rate. Same 30 years. One ends with $24,000 of interest; the other ends with more than $90,000. The only difference between tArticleCompound Interest Explained: The Math of Growing MoneyThe compound interest formula, the Rule of 72, simple vs compound interest, and the three levers — time, rate, contributions — that decide how money grows.BlogRetirement Savings by Age: How Do You Actually Compare?Somewhere between your first paycheck and your first gray hair, a question starts tapping on the window: am I behind? Maybe it arrived when a coworker mentioned