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Interest Calculator

Calculate simple or compound interest on your savings or investments.

Investment Details

Final Balance

$

Result Breakdown

Initial Principal$5,000
Total Interest Earned+$
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The Power of Compound Interest

Albert Einstein famously called compound interest "the eighth wonder of the world." Unlike simple interest, which only earns money on your initial deposit, compound interest earns money on both your deposit and the interest you've already accumulated.

Simple vs. Compound: A Real Example

Imagine investing $10,000 at 5% interest for 20 years:

  • Simple Interest: You earn $500/year. After 20 years, you have $20,000 ($10k principal + $10k interest).
  • Compound Interest (Annually): Your interest earns interest. After 20 years, you have $26,532. That's an extra $6,532 just for letting math do the work!

The Rule of 72

Want a quick mental shortcut? Divide 72 by your interest rate to see how many years it takes to double your money.
Example: At 8% return, 72 / 8 = 9 years to double your investment.

Frequency Matters

The more frequently interest compounds (Monthly vs. Annually), the faster your money grows. Banks typically compound savings monthly or daily, working in your favor. Credit cards also compound daily, working against you!