Interest is the price of borrowing money and the reward for lending it. Whether you are carrying a credit-card balance, paying off a personal loan, holding a high-yield savings account, or deciding whether a CD beats a savings account, the first question is always the same: how much interest am I actually earning or paying? This interest calculator answers that question in plain dollars. Enter the principal, the annual rate, and how long the money sits, and you immediately see the total interest, the total balance, and how that interest breaks down per day, per month, and per year.
That per-period breakdown is the part most calculators hide. Knowing that you owe $100 of interest over two years is useful, but knowing that the balance grows by about $0.14 every single day changes how you feel about paying it off early. The daily, monthly and annual lines on this page are meant to give you that everyday intuition.
How to Use
- Enter the Principal — the starting balance. For a loan this is the amount you originally borrowed; for savings it is your current deposit. The calculator refuses zero or negative principal, because interest on a negative balance is a different accounting problem.
- Type the Annual Interest Rate as a percentage. A credit card at 22.99% means you enter 22.99, not 0.2299. A savings account at 4.5% means you enter 4.5.
- Set the Time Period number, then choose the matching Time Unit: days, months, or years. If you are modeling a 30-day grace period on a credit card, enter 30 and pick days. If you are modeling an 18-month personal loan, enter 18 and pick months.
- Read the result card. Total Interest is the full I = P × r × t figure. Total Amount is principal plus interest. The three per-period lines show what one year, one month and one day of that balance cost at the same rate.
The math behind the page is the general interest formula I = P × r × t, where P is the principal, r is the annual rate as a decimal, and t is the time in years. When you pick days, t becomes your number divided by 365. When you pick months, t becomes your number divided by 12. The per-period lines are simple divisions of the annual interest figure: annual is P × r, monthly is P × r ÷ 12, and daily is P × r ÷ 365.
The Interest Formula
Interest on a principal at a fixed rate accrues linearly: every period you owe or earn the same slice of the principal. That is the core idea behind loans, bonds, savings accounts, and certificates of deposit. The formula is
I = P × r × t
Where:
- I is the total interest earned or paid.
- P is the principal — the starting balance.
- r is the annual interest rate expressed as a decimal (5% becomes 0.05).
- t is the time in years.
Take a $1,000 balance at 5% for 2 years: I = 1,000 × 0.05 × 2 = $100, and the total amount owed or grown to is $1,100. Per year that is $50 of interest; per month roughly $4.17; per day about $0.14. Those small per-day figures are why carrying a 22% credit card balance feels invisible on a statement — $0.14 a day is easy to ignore, but over 365 days it is $50.
This calculator shows simple, non-compounding interest. If interest is being added to the balance and then earning interest on itself — the way most savings and investment accounts grow — you want the compound interest view instead, where each period's interest is folded into the next period's principal.
Examples
Example 1 — The textbook case. A $1,000 loan at 5% for 2 years. Total interest is $100, total amount $1,100. Each year adds $50, each month about $4.17, and each day roughly $0.14. This is the example every finance class uses, and it is the fastest way to sanity-check that you have entered the rate correctly.
Example 2 — A short credit-card window. You have a $5,000 balance on a card at 22.99% and want to know what a 30-day billing cycle costs you in interest. Enter principal $5,000, rate 22.99%, time 30 days. The total interest for those 30 days is about $94.45, and the per-day line shows roughly $3.15 accruing every single day. That is why carrying a credit-card balance for even one month is expensive.
Example 3 — A large savings balance. A $1,000,000 deposit earning 4.5% per year for 3 years. Total interest is $135,000, and the total balance grows to $1,135,000. The per-year line alone is $45,000, which is a useful gut-check before comparing mortgage rates, CD ladders, or high-yield savings offers.
Example 4 — An 18-month personal loan. You borrow $25,000 at 3.75% to consolidate higher-rate debt and will repay over 18 months. Total interest is about $1,406.25, total amount $26,406.25, and the per-month interest line is roughly $78.12. Comparing that per-month figure to your old credit-card interest shows whether the consolidation actually saves money.
FAQ
How is interest calculated on a loan?
Interest on a simple-interest loan uses the formula I = P × r × t, where P is the principal, r is the annual rate as a decimal, and t is the time in years. Multiply the three together and you get the total interest; add it to the principal to get the total amount repaid. Most mortgages and car loans compound monthly, but the same principle applies — only the periodic rate changes.
What is the difference between simple interest and compound interest?
Simple interest is calculated only on the original principal: I = P × r × t. Compound interest adds each period's interest back into the balance so that future interest is earned on interest already paid. Over a few years the difference is small; over decades compound interest is the engine behind retirement and savings growth. This calculator shows simple interest; use a compound interest calculator for growth projections.
How much interest will I pay per month?
Take your principal, multiply by the annual rate as a decimal, and divide by 12. For example, a $10,000 balance at 6% costs 10,000 × 0.06 ÷ 12 = $50 of interest per month before any principal repayment. The monthly line on this page computes that figure for you.
How much interest is that per day?
Multiply the principal by the annual rate as a decimal, then divide by 365. A $5,000 balance at 18% accrues 5,000 × 0.18 ÷ 365 = about $2.47 per day. That daily figure is a quick way to feel the real cost of carrying a balance, because each day that passes is roughly two-and-a-half dollars gone.
Is interest on savings accounts calculated the same way?
Savings accounts almost always compound interest — usually daily, credited monthly. The nominal annual rate (APY) already reflects that compounding, so the interest you actually receive in a year is slightly higher than P × r. Use this calculator to estimate the rough order of magnitude, then switch to a compound savings calculator for a precise monthly projection.
What annual rate should I use for a credit card?
Use the APR shown on your statement, not a promotional rate. If the card advertises a 0% intro APR for 12 months and then jumps to 22.99%, model the 22.99% scenario to see what the balance costs after the intro window ends. Entering 0 gives you a clean baseline, but remember the teaser is temporary.
Why does the calculator reject a negative principal?
Interest math assumes a positive balance. A negative principal would mean the bank owes you, which is a different product (a credit balance, an overdraft refund, or a deposit that has been paid back). Entering a negative number returns an error so you do not accidentally build a repayment plan on a sign-flipped balance.
Disclaimer
This interest calculator is provided for informational purposes only and does not constitute financial, lending, tax, or investment advice. Figures are based on the simple interest formula I = P × r × t and the inputs you enter; actual loan and savings agreements compound interest, apply fees, and use day-count conventions that can differ from the 365-day approximation used here. Always confirm your effective rate, APY, and payment schedule directly with your lender or bank before making a financial decision.