Simple & Compound Interest
An educational calculation, not financial advice — real accounts vary by fees, compounding schedule, and rate changes.
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How to calculate interest
- Choose compound or simple interest.
- Enter the starting amount, annual rate and number of years, and how often interest compounds.
- Read the final balance and the interest earned.
The formulas
Simple interest: A = P × (1 + r × t)
Compound interest: A = P × (1 + r/n)^(n×t), where n is the number of times interest compounds per year.
This is a simplified educational model — it doesn't account for taxes, fees, variable rates, or additional contributions over time.
Questions about interest
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 each year.
How much is £1,000 at 5% for 10 years?
With interest compounded annually, £1,628.89. With simple interest, £1,500.
How long does it take to double my money?
Roughly 72 divided by the interest rate: at 6%, about 12 years. This is called the rule of 72.
Does compounding more often make a difference?
A little. Monthly or daily compounding earns slightly more than annual at the same rate, which is why accounts quote an AER.