Simple & Compound Interest Calculator 2025

Interest calculations are fundamental in a financial space. Whenever a user invests or borrows money, the interest rate comes into picture. The two most common type of interests are simple interest and compound interests. It is important as a financial customer to understand how both these interest rates work in order to take a well-informed decision. To make your life convenient, we have come up with an interest calculator which calculates both the interest rates.

What is Simple interest?

Simple interest is calculated only on the principal amount of a loan or deposit. It’s a simple calculation where the interest earned during every period remains constant throughout the loan term or deposit term

What is compound interest?

Compound interest is applicable for investments in general. It is a method where the interest is calculated on the principal as well as the accumulated interest on the previous period. This means the interest gets added to the principal, and the interest rate is calculated on the new and larger principal. This method of accumulating money over a period of time gives a much higher returns

What is an Interest rate calculator?

An interest rate calculator is a handy online tool that helps you calculate the interest earned or payable on a loan or deposit. There are separate calculators for simple and compound interest calculations.

Simple Interest calculator

Simple interest calculator is a basic calculator that works on the basis of Simple interest. The formula for calculating the Simple interest is given below

Simple Interest (SI)=(P×R×T)/100​

Where:

• P is the principal amount.
• R is the annual interest rate.
• T is the time period in years.

Example

Let’s say you borrow ₹10,000 at a simple interest rate of 8% per year for 3 years.

• Principal Amount: ₹10,000
• Rate of Interest: 8%
• Time: 3 years

Using the formula:

Simple Interest = (10,000 * 8 * 3) / 100 = ₹2,400

So, the total amount you’ll need to pay back after 3 years is:

• Principal Amount + Simple Interest = ₹10,000 + ₹2,400 = ₹12,400

Compound Interest calculator

The compound interest calculator uses the compound interest formula to calculate the total amount accumulated after a specified period taking into account compounded frequency

The formula for calculating the compound interest is given below

A = P (1 + r/n)^(nt)

Where:

• P: Principal Amount
• r: Annual Interest Rate (as a decimal)
• n: Number of times interest is compounded per year
• t: Number of years

Example

Let’s say you invest ₹10,000 at an annual interest rate of 8% compounded monthly for 3 years.

• P: ₹10,000
• r: 8% = 0.08
• n: 12 (compounded monthly)
• t: 3 years

Using the formula:

FV = 10,000 * (1 + 0.08/12)^(12*3) = ₹12,682.42

So, after 3 years, your investment will be worth approximately ₹12,682.42.

How to use Fincover’s Interest rate Calculator

Using Fincover’s interest rate calculator is easy. You need to either select simple interest or compound interest rate

• Enter the principal date, tenure, and rate of interest you wish to calculate the interest rate for
• The calculator will display the result in few seconds

Benefits of Fincover’s interest rate calculator

• Easy and Quick: It is easy and saves time required to do manual calculations
• Accurate Results: Provides exact estimate of the accumulated returns
• Financial Planning: Helps you to calculate the returns better thereby enabling good financial planning
• Comparison Tool: Allows you to compare different interest rates offered by banks and NBFCs to take well-informed decision

FAQ for Interest rate calculator

1. Can I use the calculator for different interest rates and time periods?
Yes, both calculators are flexible and allow you to input different interest rates

2. Does the calculator consider the compounding frequency for compound interest?
Yes, most calculator come with three compounding frequency like yearly, half-yearly, and quarterly

3. Can I use the calculator for different types of loans or deposits?
Generally, interest rate calculators can be used for all types of loans. However, some calculators are specifically designed for certain types of products

4. How accurate are the calculations provided by the calculator?
The calculators use standard financial formulas and provide accurate estimates based on your input. The actual rate may differ

5. Can I use the calculator to estimate the total amount payable or receivable, including interest?
Yes, you can both the calculators to calculate the total amount payable or receivable