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CalcMax

Interest Calculator

Range: 1 – 10,000,000

Range: 0 – 50

Range: 1 – 600

Result

10,777.16

Total amount

Interest
777.16
Average monthly interest
43.18

Interest is the rent paid on money: a principal grows at an annual interest rate for as long as the term runs. This calculator works that growth out two ways. Simple interest pays on the principal only, so the money you started with keeps earning and nothing else does. Compound interest adds each month's interest back into the principal, so the interest starts earning alongside it. The panel gives the interest, the total at the end, and the average monthly interest, so a quoted rate can be turned into the amount you actually take away.

10,000 at 5 percent: simple against compound, by term

MonthsSimple interestCompound interestCompounding adds
6250252.622.62
12500511.6211.62
2410001049.4149.41
3615001614.72114.72
6025002833.59333.59

Every row locks the principal at 10,000 and the annual rate at 5 percent, so the only thing moving across the table is time. Reading down the middle two columns shows what compounding is worth at each term: at six months the two are 2.62 apart and at five years they are 333.59 apart, because the extra comes from interest that has itself earned. The last column is that difference written out, since it is the quantity the page exists to make visible, and the two columns would otherwise have to be subtracted by eye. The term is counted in months throughout, matching the panel. Nothing in the table is rounded per period: each row is worked out from the annual rate to the final cent in one step, which is the convention the panel uses and the reason a reader who compounds month by month will find a slightly different last column.

Formula

Monthly rate ＝ annual rate ÷ 100 ÷ 12　｜　Simple interest ＝ principal × monthly rate × months　｜　Compound interest ＝ principal × ((1 ＋ monthly rate) ^ months − 1)

initialAmount
The principal, the sum the interest is worked out on. Zero is refused because every figure on the panel is derived from it, and a panel of zeroes answers nothing
annualRate
The annual rate quoted on the account, in percent. Zero is allowed and means an account that pays nothing; a negative rate is refused because this page is written from the saver's side, where a negative rate is a charge rather than interest
termInMonths
The term, counted in months, because that is the period this page compounds on. A term in years would belong on one of the two investing pages, which take years and let the compounding frequency be chosen separately
interestType
Whether interest is simple or compound. It is the only thing that separates the two branches: both are fed the same monthly rate, and the single difference is whether the interest is added back to the principal before the next period
interest
The interest for the whole term, rounded to the cent once, at the end. Rounding at every period instead would drift further apart the longer the term runs, and the drift would be invisible on a panel whose figures are supposed to explain one another
totalAmount
Principal plus interest, added from the rounded interest rather than recomputed, so the addition on the panel is exact: interest plus principal equals the total, using the figures as printed
averageMonthlyInterest
The interest spread evenly across the months of the term. It is an average and not a monthly payment: under compounding the interest accelerates, so the first month earns far less than the last

Use this calculator when the term is quoted in months and you want the money: a savings account held for a set number of months, a deposit with a stated maturity in months, a loan term you want to see from the other side. Use the simple interest page or the compound interest page when the term is quoted in years, and use the compound one in particular when you need to choose how often interest is added, including daily and continuous compounding.

Worked examples

  1. Default: 10,000 for 18 months at 5 percent, compounded

    1. Monthly rate: 5 ÷ 100 ÷ 12 ＝ 0.0041666667
    2. Growth factor over 18 months: 1.0041666667 ^ 18 ＝ 1.0777156
    3. Interest: 10,000 × (1.0777156 − 1) ＝ 777.1556, rounded to 777.16
    4. Total: 10,000 ＋ 777.16 ＝ 10,777.16
    5. Average per month: 777.16 ÷ 18 ＝ 43.1756, rounded to 43.18

    The default figure is the one to read first, because the addition closes exactly: the interest plus the principal gives the total, using the printed figures and nothing else. The last line is the one that needs the warning attached — 43.18 is what the term averages, not what any month pays. Under monthly compounding the eighteenth month earns noticeably more than the first, and the page says so rather than letting the average imply otherwise.

  2. The same deposit as simple interest

    1. Monthly rate: 5 ÷ 100 ÷ 12 ＝ 0.0041666667
    2. Interest: 10,000 × 0.0041666667 × 18 ＝ 750.00
    3. Total: 10,000 ＋ 750.00 ＝ 10,750.00
    4. Average per month: 750.00 ÷ 18 ＝ 41.6667, rounded to 41.67

    Changing one dropdown, and only one, turns the first example into this one. Everything else is identical: the same principal, the same annual rate, the same eighteen months, and the same monthly rate underneath. The 27.16 difference between the two totals is the whole of what compounding is worth at this rate over a year and a half, and it is the reason both branches live on one page rather than two.

  3. 5,000 for a year at 3.5 percent, compounded

    1. Monthly rate: 3.5 ÷ 100 ÷ 12 ＝ 0.0029166667
    2. Growth factor over 12 months: 1.0029166667 ^ 12 ＝ 1.0355665
    3. Interest: 5,000 × 0.0355665 ＝ 177.8325, rounded to 177.83
    4. Total: 5,000 ＋ 177.83 ＝ 5,177.83
    5. Average per month: 177.83 ÷ 12 ＝ 14.8192, rounded to 14.82

    A fractional rate and a term of exactly one year, which is the shape most savings quotes come in. The annual rate is 3.5 percent and the interest over the year is 177.83 on 5,000, so the effective return is a shade over 3.5 percent rather than exactly it — the extra comes from the eleven months whose interest was already earning. The page does not print that effective figure, because the compound interest page does it properly with a frequency you choose.

  4. 2,000 for 6 months at 12 percent, simple

    1. Monthly rate: 12 ÷ 100 ÷ 12 ＝ 0.01
    2. Interest: 2,000 × 0.01 × 6 ＝ 120.00
    3. Total: 2,000 ＋ 120.00 ＝ 2,120.00
    4. Average per month: 120.00 ÷ 6 ＝ 20.00

    Three whole figures and no rounding anywhere, which makes this the example to check the arithmetic on by hand. A rate of 12 percent a year is one percent a month, so six months on 2,000 is six payments of 20 and an average of exactly 20. Under compounding the same inputs would come to 123.04, and that 3.04 of difference is the interest that the earlier months would have earned had it been left in.

  5. 10,000 for 50 years at 5 percent, compounded

    1. Monthly rate: 5 ÷ 100 ÷ 12 ＝ 0.0041666667
    2. Growth factor over 600 months: 1.0041666667 ^ 600 ＝ 12.1193830
    3. Interest: 10,000 × 11.1193830 ＝ 111,193.83
    4. Total: 10,000 ＋ 111,193.83 ＝ 121,193.83
    5. Average per month: 111,193.83 ÷ 600 ＝ 185.3231, rounded to 185.32

    The longest term the page accepts, and the row that shows compounding is not a straight line. The same inputs as simple interest come to 25,000 of interest, so the two branches that sat 27 apart over eighteen months sit 86,194 apart over fifty years. It is also the row that would move if the interest were rounded every month rather than once at the end, which is exactly the convention the panel is built on.

Limitations

Three things are worth knowing before reading the figures. The first is the rounding order: the interest is rounded to the cent once, at the end, and the total is the principal plus that rounded interest rather than a second computation. The gain is that the panel explains itself, since the interest plus the principal equals the total exactly as printed. The cost lands at the far end of a long term, where rounding every month instead would give a slightly different cent. The second is what the average monthly interest is not. It is the whole term's interest spread evenly, and under compounding no month actually pays it: the early months pay less and the later ones more, so a saver who expects the same amount each month will not find it here. It is also not the monthly rate applied to the principal: under compounding those two figures differ, while under simple interest they coincide, which is what makes them easy to confuse. The third is the pair of names. The interest on this page is the same quantity as the interest earned on the compound interest page, and the two carry different labels in the data behind the site; they were built in different batches and renaming either would move already-published text without fixing anything a reader can see. Rates are not checked against anything: this page has no second source for the rate you type in, and the term is taken as a run of whole months with an interest rate that never changes across them, which no real account promises.

Frequently asked questions

What is the difference between simple interest and compound interest?
Whether the interest is added back to the principal. Under simple interest only the money you started with earns, so the interest is the principal times the monthly rate times the number of months. Under compound interest each month's interest joins the principal and earns alongside it, so the growth is a power rather than a multiple. On 10,000 at 5 percent for eighteen months, the difference is 750.00 against 777.16 — 27.16, which is the interest the earlier months would have earned had it been left in.
Why is the term counted in months rather than years?
Because the compounding frequency on this page is fixed at monthly, and a frequency and a term have to agree. A term in months and a monthly rate are the same unit, so no conversion stands between the two figures on the panel. If you want to choose the frequency — quarterly, daily, or continuous, where the term has to be in years — the compound interest page takes years and lets you pick.
Is the average monthly interest what I get each month?
No. It is the whole term's interest divided by the number of months, and under compounding no month pays exactly that. The first month earns the monthly rate on the principal alone; the last month earns it on the principal plus everything the earlier months added. The average sits between the two. Use it to compare two terms of different lengths, not to plan a monthly budget.
Why does the total not match if I multiply the interest out myself?
Because the interest is rounded to the cent once, at the end, and the total is the principal plus that rounded figure. Every figure on the panel is derived from the rounded interest, so the addition closes exactly: interest plus principal equals the total, as printed. Work the other way and you will occasionally be a cent out, which is the price of a panel whose figures explain one another rather than each being computed separately.
What does a rate of zero mean here?
An account that pays nothing. It is allowed, and the panel returns zero interest, a total equal to the principal, and an average of zero. A negative rate is refused instead, because this page is written from the saver's side: on a deposit a negative rate is a charge rather than interest, and the arithmetic of a fee on a balance is not what the figures here describe.
Does the interest rate stay the same for the whole term?
The page assumes it does, because it takes one rate and one term and no dates. Real accounts do not promise that: a rate quoted today can be reset next year, and a term long enough to matter will cross several rate decisions. What the page gives you is the arithmetic of a single fixed annual interest rate held for a set number of months, which is the figure you need before adding any of that.

References

Related calculators

Compound Interest CalculatorSee how savings grow with compounding at any frequency.Simple Interest CalculatorInterest earned on a principal without compounding.Future Value CalculatorFuture value of a present sum at a given rate.Loan CalculatorRepayment amounts for any fixed-rate loan.