Interest Calculator
Understanding Interest
Interest is the cost of borrowing money or the return on invested capital. Simple interest is calculated only on principal, compound interest includes previously earned interest.
Key Formulas
- Simple: I = P × r × t
- Compound: A = P(1 + r/n)^(nt)
Compound Frequency
- Annually (1x), Semi-annually (2x), Quarterly (4x), Monthly (12x), Weekly (52x), Daily (365x)
💡 Tips
- Start investing early - compound interest is powerful over time
- Higher compound frequency yields more returns
- The rule of 72: divide 72 by rate to estimate doubling time
- Always compare APR not just interest rate