What this page sets up
The calculator opens with simple interest in the large figure: 5,000 borrowed or lent at 6% a year for 3 years, so 900 of interest and 5,900 in total. The compound card next to it keeps the same money on yearly compounding, 5,955.08, so you can see what interest on interest would add. Set the time in years and months; 2 years and 6 months is 2.5 years in the formula.
Working it by hand
Simple interest grows by the same amount every year: here 300 after the first year, 600 after the second, 900 after the third. To check any row, multiply the principal by the rate and by the years so far. For a share of a year, count months over 12 or days over 365. If you need interest for an exact number of days between two dates, the daily interest page counts them for you.
Lending, borrowing and saving
- Lending money to family or a friend: agree the rate and the date it’s due, and the 5,900 figure is the amount to ask back.
- A loan you’re repaying monthly: the interest falls as the balance falls, so the real total is lower than this figure; your lender’s amortization schedule shows it month by month.
- Savings: banks pay compound interest, so read the compound card, or the compound interest page if you add money each month.
Everything stays in your browser: change the Currency field if you work in pounds, euros or rupees; the formula is the same everywhere.