Interest Calculator
Interest and total with simple or annual compound interest.
How it works
Simple: P×(1+r·t); Compound: P×(1+r)^t
Simple interest uses only the principal; compound folds each year’s interest back in, differing sharply over time.
Worked example
Principal 100,000 at 4% for 3 years:
- Simple:
100000 × 4% × 3 = 12,000 - Compound:
100000 × (1.04³ − 1) ≈ 12,486
The 3-year gap is only 486, but over 30 years it grows into tens of thousands.
Notes and limitations
Over short periods simple and compound interest look similar; over decades the gap explodes. Check whether the contract compounds and how often — "1% per month" sounds small but is about 12.7% a year.