Calcuped Calculator Logo Calcuped

Interest Calculator

Compare simple and compound interest earnings. See how your money grows with different interest rates and compounding frequencies over time.

Interest Calculation

$

Initial investment amount

%

Annual percentage rate (APR)

$

Regular contributions to boost growth

Interest Calculation Results

$16,470
Final Amount
$6,470
Interest Earned
$10,000
Principal + Deposits

Interest Type Comparison

Compound Interest $16,470
Interest: $6,470
Simple Interest $15,500
Interest: $5,500
Compound Advantage: $970

Calculation Details

Principal Amount: $10,000
Interest Rate: 5.5% annually
Time Period: 10 years
Compounding: Monthly
Regular Deposits: $0/month
Effective Annual Rate: 5.64%

Growth Over Time

Sample data points

Simple vs Compound Interest

Compound Interest

With compound interest, you earn interest on both your initial principal and previously earned interest. This creates exponential growth over time.

A = P(1 + r/n)^(nt)
Where: A = final amount, P = principal, r = rate, n = compounding frequency, t = time
  • • Interest earns interest (compounding effect)
  • • Growth accelerates over time
  • • More frequent compounding = higher returns
  • • Best for long-term investments

Simple Interest

With simple interest, you only earn interest on your initial principal amount. The interest earned doesn't compound or grow over time.

Interest = P × r × t
Where: P = principal, r = annual rate, t = time in years
  • • Interest calculated only on principal
  • • Linear growth over time
  • • Predictable, consistent returns
  • • Common in short-term loans

Impact of Compounding Frequency

Example: $10,000 invested at 6% annual interest for 10 years

$17,908
Annually
1x per year
$18,061
Semi-Annually
2x per year
$18,140
Quarterly
4x per year
$18,194
Monthly
12x per year
$18,219
Daily
365x per year
$18,221
Continuous
Infinite
Key Insight: More frequent compounding increases returns, but the benefit diminishes as frequency increases. Monthly compounding captures most of the benefit.

Maximizing Interest Earnings

Start Early

Time is the most powerful factor in compound interest. Starting early allows more time for compounding to work its magic, even with smaller initial amounts.

Regular Contributions

Making regular deposits amplifies the compounding effect. Even small, consistent contributions can significantly boost your final returns over time.

Shop for Rates

Small differences in interest rates compound over time. A 1% higher rate can result in thousands of dollars more over a decade or longer investment period.

Avoid Early Withdrawals

Breaking the compound interest cycle by withdrawing early significantly reduces your potential returns. Let your money work for you uninterrupted.

Related Calculators

Savings Calculator

Calculate savings growth with regular deposits

Investment Calculator

Analyze investment returns and growth

Retirement Calculator

Plan for long-term compound growth