Compare simple and compound interest with monthly contributions, tax on interest.
Example scenarios
Display currency
Set the currency before entering principal and monthly contribution amounts. Currency changes formatting only; the interest math stays the same.
Contribution timing
Result
Compound interest ends at $16,330.81 after 5 years. Simple interest finishes at $15,125.00 using the same inputs.
After 20% tax on interest and 2.5% inflation, the compound scenario has a real-value balance of $14,022.04.
Simple interest
Simple interest applies the rate to the original principal only. Regular contributions are added, but they do not earn interest inside this scenario.
Compound interest
Contributions are added at the end of each month before the next compounding step.
Balance difference
$1,205.81
How much more compound interest ends with than simple interest.
Interest difference
$1,205.81
Extra interest earned from compounding rather than simple interest.
Compound premium
7.97%
Compound final value as a percentage uplift over simple interest.
Rate gap
0.09%
Compound effective annual rate minus the simple annual rate.
After-tax interest
$1,864.65
Tax drag
$466.16
Real-value balance
$14,022.04
Inflation drag
$1,842.61
Growth context
On the same inputs, compound growth finishes $1,205.81 ahead of simple interest. That difference comes from interest-on-interest and, when used, monthly contributions arriving before compounding.
Tax and inflation assumptions are shown separately because they answer different questions: tax reduces nominal interest earned, while inflation estimates the purchasing power of the after-tax ending balance.
Rate comparison
How compound future value changes at nearby rates over 5 years.
| Rate | Compound | Interest | Simple |
|---|---|---|---|
| 1.5% | $14,729.21 | $729.21 | $14,375.00 |
| 2.5% | $15,241.09 | $1,241.09 | $14,625.00 |
| 3.5% | $15,774.63 | $1,774.63 | $14,875.00 |
| 4.5% | $16,330.81 | $2,330.81 | $15,125.00 |
| 5.5% | $16,910.64 | $2,910.64 | $15,375.00 |
| 6.5% | $17,515.18 | $3,515.18 | $15,625.00 |
| 7.5% | $18,145.54 | $4,145.54 | $15,875.00 |
Interest Basics
An interest calculator helps you compare how money grows or accrues under different interest assumptions. Use it as a simple interest calculator, compound interest calculator, savings interest calculator, or borrowing estimate to see the ending balance, total interest, contribution total, after-tax interest, and inflation-adjusted real value before you rely on a quoted rate or product illustration.
Simple interest applies the quoted percentage only to the original principal. Compound interest applies the rate to the growing balance, so previously earned interest can itself earn further interest. That is why compound growth usually produces a higher ending balance over time than simple interest at the same stated rate.
For borrowers, the same principle works in reverse: compounding can make long-held balances more expensive. A useful interest calculator should therefore make the interest type visible rather than treating every rate as if it behaves the same way.
The simple-interest formula is linear and easy to follow. Compound interest depends on the number of compounding periods each year, which is why the stated annual rate and the effective annual rate are not always identical.
When recurring monthly contributions are added, the most practical approach is usually a period-by-period simulation. That makes it easier to estimate an ending balance from a starting principal, a fixed annual rate, a time horizon, and a regular deposit pattern.
Simple interest: I = P x r x t
I is interest earned or charged, P is the principal, r is the annual rate as a decimal, and t is time in years.
Compound balance: A = P x (1 + r / n)^(n x t)
A is the ending balance, P is the principal, r is the annual rate, n is the number of compounding periods per year, and t is time in years.
Compounding frequency changes how often interest is added back into the balance. Daily compounding usually yields slightly more than monthly compounding at the same stated annual rate, while annual compounding yields slightly less. The difference is often modest over short periods but becomes more noticeable over longer horizons.
Monthly contributions can matter as much as the rate itself. Regular deposits increase the base on which future interest is earned, so a calculator that includes both the starting amount and recurring contributions gives a more realistic planning picture than a lump-sum-only model.
A nominal interest calculator can overstate the result if the interest is taxable or if inflation erodes purchasing power. This page separates the gross compound balance, estimated tax drag, after-tax interest, and real-value balance so you can see whether a quoted annual rate is still useful after common real-world frictions.
The tax and inflation settings are intentionally simple planning assumptions. They do not replace local tax advice, and they do not model account-level tax shelters, fee schedules, changing inflation, or product-specific accrual rules. They do, however, make the result more decision-ready than a bare future-value number.
The most useful outputs are usually the ending balance, the total amount personally contributed, and the total interest. Looking at those figures side by side helps you separate what came from your own deposits from what came from growth or financing cost.
This calculator still simplifies reality. Taxes, fees, changing rates, and variable contribution schedules can materially change the real outcome. That is why the result should be treated as a planning estimate rather than a guarantee.
Use this broad interest calculator when you want a side-by-side comparison of simple interest and compound interest from the same principal, annual rate, term, contribution pattern, and compounding frequency. It is best for answering questions such as how much interest you might earn, how much extra compounding adds, or how tax and inflation change the practical result.
Use the dedicated compound interest calculator when the search intent is only future-value compounding, use a savings calculator when the main question is how deposits build toward a savings plan, and use loan or APR calculators when repayments, fees, amortisation, or legally defined borrowing disclosures matter.
Frequently asked questions
Simple interest is calculated only on the original principal, while compound interest is calculated on the principal plus previously accumulated interest. Over time, compound interest usually produces a larger ending balance at the same stated rate.
Usually not over very short periods, but the difference grows over time. More frequent compounding means interest is added back into the balance sooner, so future interest has a slightly larger base to work from.
That split helps you see how much of the ending balance came from your own money versus how much came from growth. It is especially useful when recurring monthly contributions are part of the plan.
Yes. The simple-interest result shows interest calculated on the original principal only. The compound result appears beside it so you can see how much interest-on-interest changes the ending balance under the same rate and term.
Monthly contributions increase total contributions and, in the compound scenario, can also earn future interest. The calculator lets you choose whether contributions arrive at the beginning or end of each month because earlier deposits have slightly more time to compound.
Taxable interest can leave you with less spendable growth than the gross interest figure suggests. The tax setting estimates a simplified drag on compound interest so you can compare gross interest with after-tax interest.
The inflation-adjusted or real-value balance discounts the after-tax ending balance by the inflation assumption. It estimates purchasing power in today's money rather than only showing the nominal future balance.
No. APR is a borrowing disclosure that can include costs beyond the stated interest rate. This calculator uses a fixed annual rate for simple and compound interest modelling; loan products may require APR, fees, repayment schedules, and product-specific rules.
No. It assumes a fixed rate and consistent contribution pattern. Real savings products, loans, and investment returns can change over time and may also include fees, tax, or other terms that are not captured here.
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