Interest Calculator
Principal ($), Rate (% / year), and Time (years) show simple interest and annual compound interest together. Compounding on this page is once per year, and the compound line also gives the final balance.
How to use
- Enter the starting sum in Principal ($). The sample is 5000.
- Enter a yearly percent in Rate (% / year). The sample is 5, which the script divides by 100 before any multiplication.
- Enter Time (years). The step is half a year, so 2.5 is allowed. A blank or zero time yields zero interest.
- Click Calculate. The large line is labeled Simple and is principal times rate times time. The detail line is Compound (annual) interest and Final balance (compound).
When it helps
Use it when you want the straight-line charge, principal times rate times years, next to a balance that compounds only on each anniversary. A private note that states simple interest, set beside a yearly compound figure for the same inputs, is the comparison the two lines are built for.
If you need monthly, daily, or quarterly compounding, switch to the compound interest calculator and pick a frequency. That page does not print a simple-interest line. If the balance is a loan you will pay down each month, the payment calculator is the amortizing formula; this page never builds a payment.
Limits
Compounding is once per year, not monthly. The compound interest is principal times (1 + rate) to the power of Time (years), minus principal. The final balance is principal plus that compound interest. Simple interest stays on the large line and does not get its own final-balance label. A fractional year uses a fractional power for the compound side and a straight fraction for the simple side, so the two methods do not split a partial year the same way.
The form does not ask for fees, a day-count convention, or extra deposits. The result is arithmetic, not a lender quote and not a bank statement. It will not show a monthly payment, a payoff date, or interest that compounds inside the year.
Questions
Which number is simple interest?
The large Simple figure. For the sample, 5000 times 0.05 times 5 is 1250. That product is not compounded, and the page does not add it back into a second balance line.
What does Final balance (compound) include?
It is principal plus compound interest only. It is not principal plus simple interest. On the sample, annual compounding produces a larger interest figure than 1250, and the balance is principal plus that larger figure.
Why is there no monthly option?
The exponent is the year count, so the rate is applied once per year. Changing Time (years) does not turn the year into twelve periods. Use another calculator on this site when the contract compounds more often, and do not read this pair of lines as an offer from a lender.