wikiHow Interest Calculator An interest calculator helps you determine how much interest you can earn or how much interest you'll need to pay on a loan, based on the principal amount, interest rate, and time period. To calculate the simple interest, you can use the following formula: Simple Interest = (Principal x Rate x Time)/100 where: * Principal is the initial amount of money * Rate is the annual interest rate * Time is the time period for which the interest is being calculated For example, let's say you invest $5,000 at an annual interest rate of 3% for 2 years. To calculate the simple interest earned, you would use the following formula: Simple Interest = (5,000 x 3 x 2)/100 Simple Interest = $300 So you would earn $300 in simple interest over 2 years on a $5,000 investment at 3% annual interest rate. To calculate the compound interest, you can use the following formula: Compound Interest = P(1 + r/n)^(nt) - P where: * P is the principal amount * r is the annual interest rate * n is the number of times the interest is compounded per year * t is the time period in years For example, let's say you invest $5,000 at an annual interest rate of 5% for 5 years, and the interest is compounded annually. To calculate the compound interest earned, you would use the following formula: Compound Interest = 5,000(1 + 0.05/1)^(1*5) - 5,000 Compound Interest = $1,276.28 So you would earn $1,276.28 in compound interest over 5 years on a $5,000 investment at 5% annual interest rate, with the interest compounded annually. Page