Interest Calculator
Toggle between simple and compound interest formulas.
Last updated: January 2025 · Built for the 2024–25 financial year
Inputs
Results
Final amount
$12,834
Interest earned
$2,834
Results are estimates only. For financial advice, consult a licensed adviser.
Overview
Simple vs compound interest
Simple interest pays the same dollar amount each period — used for some short-term loans and savings bonds. Compound interest pays interest on accumulated interest, the engine of long-term wealth.
Over short periods the difference is small. Over 30 years at 7%, $10,000 grows to $24,000 simple but $76,000 compound — three times more.
Formula
Side-by-side
Simple: A = P(1 + rt) Compound: A = P(1 + r/n)^(nt)
Worked example
$10,000 at 6% for 10 years
- Simple: 10,000 × (1 + 0.06 × 10) = $16,000.
- Compound monthly: 10,000 × (1 + 0.06/12)^120 = $18,194.
- Difference of $2,194 from compounding.
Answer: Compound earns $2,194 more over 10 yrs
Pro tips
- •Daily-compounded HISAs beat monthly-compounded competitors fractionally.
- •Mortgage interest compounds daily — extra repayments save outsized interest.
- •Bonds usually quote simple yield-to-maturity.