Interest Calculators

Simple vs. Compound Interest

Understanding how interest is calculated is crucial for making informed financial decisions, whether you are saving money or taking out a loan.

Simple Interest

Interest is calculated only on the principal amount. It remains constant throughout the tenure. This is rarely used in modern banking for savings but is the basis for some short-term loans.

Compound Interest

Interest is calculated on the principal amount AND the accumulated interest from previous periods. This is the standard for most savings accounts, fixed deposits, and mutual funds, allowing your wealth to grow faster over time.