Interest Calculator — simple, compound & loan interest side by side

How it works

Three mechanisms, one set of inputs. Simple: I = P·r·t, flat every year because the base never changes — short notes and coupon arithmetic. Compound (annual here): I = P(1+r)^y − P, each year's interest joining the base — savings and investments. Amortizing loan: interest accrues monthly on a balance the payments keep shrinking, computed with the same primitive the loan family cites; its total always lands below compound (the base falls instead of growing) and typically above nothing at all. The labeled table puts all three on your numbers, which is the fastest way to see why "the interest on $10,000 at 8% for 5 years" is not one question.

Worked example

One published case per mechanism. Simple: Chad's $10,000 loan at 8% simple interest costs $800 in a year (§8.02 — the preset). Compound: $3,000 at 7% for four years earns $932.39 of interest on the way to $3,932.39 (§8.02). Loan: a $250,000 mortgage at 6% for 30 years pays $289,596.80 of interest per the published lifetime total (§8.05). On the default inputs this page computes all three side by side — its own arithmetic on the three published formulas.

Frequently asked questions

Which interest formula applies to me?

Read the contract's word: "simple interest" notes and most bond coupons use P·r·t; savings accounts and investments compound; installment loans amortize. This page exists for the moment before you know — it shows all three so the right one is recognizable by its number.

Why is loan interest less than compound interest at the same rate?

Direction of the balance: compound interest grows its base every period, while a loan's payments shrink it — so the same rate applied to a falling balance accumulates less. That is also why extra loan payments save so much: they accelerate the fall.

When do simple and compound give the same answer?

At exactly one year, before any interest has had a chance to earn interest — the year-one row of the two siblings' comparison. Every year after, the compound line pulls ahead, and the gap itself compounds.

Is the compound figure here what my savings account would pay?

Close but not exact: this page compounds annually for comparability, while accounts often compound daily or monthly — slightly more. The compound-interest calculator handles frequency precisely; the cd calculator adds the locked-term framing.

Why does this page exist next to simple-interest and compound-interest?

Those pages go deep on one mechanism each; this one puts the three on a single table for the same inputs — the comparison surface neither sibling owns. Recognize your mechanism here, then use its dedicated page for the details.

Can the loan number be compared to a real loan quote?

Yes, structurally: it is the total interest of a fully amortized loan at that rate and term with monthly payments — the loan calculator's arithmetic. Real quotes add fees, which change the effective cost; the apr calculator prices that difference.

How accurate is this, and what does it exclude?

Each formula is exact for its own mechanism at a constant rate. It excludes compounding-frequency detail (annual is used for the compound row), fees, taxes, and payment variations on the loan side — and it deliberately renders no verdict, since the three numbers answer different contracts, not the same one.