Interest Rate Calculator
Calculate simple and compound interest. Enter the principal, rate and period to get the interest and final amount.
Interest
Amount
Yield
Difference between Simple and Compound Interest
Simple Interest: always figured on the original principal, with no change over time. The formula is A = P × (1 + r × t).
Compound Interest: here the calculation falls on the amount already accumulated, so interest itself earns more interest. The formula is A = P × (1 + r)^t.
Simple interest vs. compound interest
Given principal C, rate i per period and time t, simple interest is J = C·i·t and the future value is M = C(1 + i·t) — interest is always calculated on the original principal. Compound interest is M = C(1 + i)^t, with interest accruing on previously accumulated interest. For C = R$ 1,000 at 10% per year over 5 years: simple gives M = R$ 1,500; compound gives M ≈ R$ 1,610.51.
Equivalent rates differ between regimes. Compounded annual to monthly: i_month = (1 + i_year)^(1/12) − 1. Nominal annual to monthly (simple/linear): i_month = i_year/12. Mixing the two is a classic mistake — a 12% nominal annual is not the same as 1% effective per month compounded (which equals 12.68% per year).
When each regime is used
Brazilian courts, late-payment fines, short-term commercial contracts and overdue taxes traditionally use simple interest. Compound interest dominates savings accounts, CDBs, government bonds, mortgages, vehicle loans and credit-card revolving balances. With Selic around 15% per year in 2026, the difference becomes significant on horizons above 12 months. The Rule of 72 estimates doubling time under compounding: divide 72 by the percent rate — at 8%/year, money doubles in roughly 9 years.
FAQ
Which regime yields more? Compound interest always exceeds simple interest for t > 1 period, and the gap widens exponentially with time.
How do I convert annual to monthly correctly? If the rate is effective (compound), use (1 + i)^(1/12) − 1. If nominal (simple), divide by 12. Always check which one the contract specifies.
What is the Rule of 72? An approximation: 72 ÷ rate(%) ≈ years to double under compound interest. Useful for quick mental estimates.
Is the Selic rate simple or compound? The Selic target is annualised under a compound 252-business-day convention. Daily rates are derived as (1 + Selic)^(1/252) − 1.
Simple and compound interest made clear
Knowing how much money earns, or how much a debt swells, comes down to understanding the gap between the two kinds of interest. Simple interest always applies to the initial amount. Compound interest applies to the total already accumulated, and that is exactly where the snowball effect comes from. The calculator lays both cases out together.
Enter the principal, the rate and the period. In return you get the interest generated and the final amount. You can simulate an investment, project the cost of a loan, or just compare how each regime behaves as time goes by. When both appear together, it becomes far more obvious why compound interest weighs so much over the long run.
Nothing you type gets stored, because the whole calculation runs in the browser. Change any field and the result refreshes, which helps you try out different scenarios without redoing the work.
Read more on this
Related Tools
Simple Interest Calculator
Compute simple interest with J = C × i × t. Auto-adjusts time unit (days, months, years).
Compound Interest Calculator
Calculate final amount, accumulated interest and return with compound interest. Supports initial capital, monthly contributions and monthly or annual rates.
Inverse Rule of 72 (yield to double in N periods)
Given N periods to double your capital, compute the required yield using Rule of 72/70/69.3 and compare to the exact discrete rate.
The results provided by this tool are for general informational and educational purposes only and do not constitute professional, financial, medical, legal, tax or accounting advice. Always confirm important decisions with a qualified professional and official sources.