📖 How to Use This Interest Calculator
1
Select your currency - Choose from 100+ world currencies.
2
Enter principal amount - Input the initial amount.
3
Set time & rate - Enter years and annual interest rate.
4
Choose interest type - Simple or Compound.
5
Select compounding frequency - For compound interest only.
6
Click "Calculate" - Get instant results.
📚 Simple vs Compound Interest
Simple Interest is calculated only on the principal amount. It's linear growth.
Compound Interest is calculated on the principal plus previously earned interest. It's exponential growth.
🧮 Interest Formulas
Simple: Interest = P × r × t
Compound: FV = P × (1 + r/n)^(n×t)
💡 Understanding APY
APY represents the actual annual return accounting for compound interest. For example, a 5% annual rate compounded monthly gives an APY of about 5.12%.
❓ Frequently Asked Questions
APR vs APY?
APR is the simple rate without compounding. APY includes compounding, giving you the true annual return.
How does compounding frequency affect returns?
More frequent compounding leads to higher returns. Daily > Monthly > Quarterly > Annually.
What is the Rule of 72?
Divide 72 by the interest rate to estimate years to double your money.
How does inflation affect interest earnings?
Inflation reduces purchasing power. Real return = nominal return - inflation rate.