Interest calculator
How much interest does this amount earn or cost? Simple or compound, for a set term or between two exact dates, with the day-count rules banks and bond markets actually use. Convert APR and APY, and see what an add-on loan really costs.
Quick answer: $10,000 at 5% for 10 years earns $5,000 of simple interest, or $6,470 compounded monthly (an APY of 5.12%).
By John Crane, MBA & the Editorial Team · Updated for the 2026 tax year. How we check our numbers
Interest earned, 3 years
$1,614.72
Ending balance $11,614.72 at an effective 5.116% a year
| Principal | $10,000 | 86.1% |
|---|---|---|
| Interest earned | $1,615 | 13.9% |
- Interest earned
- $1,614.72
- Ending balance
- $11,614.72
- Effective yield (APY)
- 5.116%
- Daily interest
- $1.37
- Compounding adds
- $114.72
- Term in years
- 3
Interest over time: simple vs compound
Year by year
3 rows| Year | Interest | Balance | If simple |
|---|---|---|---|
| 1 | $511.62 | $10,511.62 | $10,500.00 |
| 2 | $537.79 | $11,049.41 | $11,000.00 |
| 3 | $565.31 | $11,614.72 | $11,500.00 |
How this is calculated
Simple and compound
I = P × r × t A = P × (1 + r / m)^(m × t)
P is the principal, r the annual rate, t the time in years and m the compounding periods per year. Continuous compounding uses e^(r × t). Daily compounding uses the day count's year: 365 days, or 360 for Actual/360 and 30/360.
Day counts
Actual/365 and Actual/360 count calendar days over a 365- or 360-day year. 30/360 (bond basis, ISDA 2006) counts every month as 30 days. Actual/Actual (ISDA) splits the period by calendar year and divides each part by that year's length.
APR, APY and add-on loans
APY = (1 + APR / m)^m − 1. An add-on loan charges P × r × years up front and splits the total into equal monthly payments; its true APR is the monthly rate that makes those payments repay the amount borrowed, times 12, the actuarial method Regulation Z uses.
Sources
Questions
What is the difference between simple and compound interest?
Simple interest is paid only on the original amount. Compound interest is also paid on interest already earned, so it grows faster: $10,000 at 5% for 10 years earns $5,000 simple but $6,470 compounded monthly.
Why does Actual/360 charge more interest?
It divides a full year of calendar days by 360, so a 365-day year counts as 1.0139 years. On a $100,000 loan at 8%, that is about $111 more interest a year than Actual/365. Many commercial loans and money market instruments use it.
Should I compare savings accounts by APR or APY?
By APY. It includes compounding, so accounts that compound daily and monthly can be compared directly. Banks must state APY on deposit accounts under the Truth in Savings Act.