Interest Calculator
Online interest calculator with simple interest, compound interest and equal monthly installment modes, covering deposit returns, loan repayments and investment growth, with a period-by-period repayment schedule.
FreeOnline Tool
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How to Use
Pick a calculation mode and fill in the parameters:
- Simple interest: interest is not added back to the principal, which suits short-term deposits and some bank products. Interest = principal × annual rate × years.
- Compound interest: each period's interest rolls into the principal, which suits money market funds and long-term deposits. Final amount = principal × (1 + periodic rate)^periods.
- Equal installments: a fixed monthly repayment, used for mortgages and consumer loans. Monthly payment = principal × monthly rate × (1+monthly rate)^months ÷ [(1+monthly rate)^months − 1].
Enter the principal, annual rate and term, then click Calculate to see total interest and a period-by-period breakdown.
Features
- Three calculation modes: simple interest, compound interest and equal installment repayment, covering deposits, investments and loans.
- Flexible term units: terms can be given in years, months or days to match different products' interest periods.
- Installment schedule: lists each month's payment, the principal and interest components, and the remaining balance, making the repayment structure clear.
- Live calculation: results appear as soon as you enter the parameters, with nothing to submit.
- Rate conversion: shows the monthly rate automatically for easy comparison against bank products.
Use Cases
Estimating mortgage payments
Enter the loan amount, annual rate and term and use equal installment mode to see the monthly payment and total interest before committing to a purchase.
Calculating term deposit returns
Enter the deposit amount and the bank's annual rate and use simple interest mode to find the interest at maturity, then compare products.
Projecting money market fund returns
Use compound mode with the principal, seven-day annualized yield and holding period to estimate expected returns.
Comparing consumer loan offers
Enter the borrowing amount and each provider's monthly rate to compare total interest and monthly payments side by side.
FAQ
Should I use simple or compound interest for a bank term deposit?
Bank term deposits are usually calculated on a simple interest basis until maturity, and only start a new interest period once the deposit rolls over, which behaves like compounding. For terms under a year the difference is small, while compound mode is more accurate for long-term deposits.
Why is the total interest on an equal installment loan so high?
That is expected, especially on long mortgages. Early on the balance is large, so interest makes up much of each payment, and its share falls as the principal is repaid. Total interest exceeding the principal over 30 years is common, and paying early or shortening the term reduces it.
My bank quotes a slightly different monthly payment. Why?
There are a few common reasons: banks may charge interest on actual days rather than whole months, the gap between drawdown and the first payment date may be less than a full month and be charged separately, and banks round differently. This tool uses standard whole months, so the difference is usually only a few units of currency.
How do I convert an annual rate to a monthly rate?
Monthly rate = annual rate ÷ 12, so an annual rate of 3.6% gives 0.3% per month. Strictly, compounding should use the nominal rate conversion, but banks generally divide the annual rate by 12 in practice and this tool follows that convention.