Interest calculator
Work out how much interest a balance earns or costs. Simple interest is charged only on the original amount; compound interest is charged on the balance including interest already added, so it grows faster.
- Interest
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- Final balance
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The formulas
- Simple interest:
I = P × r × t - Compound:
A = P × (1 + r/n)n×t
P is the principal, r is the annual rate as a decimal, t is the time in years, and n is the number of times interest is added each year.
Worked example
Hold £1,000.00 at 6% a year for 2 years. With simple interest you earn £120.00, giving £1,120.00. Compounding monthly you earn £127.16, giving £1,127.16 — a little more, because each month's interest then earns interest too.
Where to go next
- Loan affordability self-check — before any borrowing decision.
- Our business loan — the cost, the cap and who can apply.
- Help with payments — if money is tight, talk to us early.
- MoneyHelper — free, impartial money guidance backed by the government.
- gov.uk Business Finance Support — grants and finance you may be eligible for.