Simple vs Compound Interest Calculator Use this calculator to compare the difference between simple interest and compounding interest. Unlike other problems where we solve for P or r here we need to solve for the power in the right hand side n. Calculate interest on a 90-day 5000 loan at 11 using a a 360-day year and b a 365-day year.
It can be handy to visualize compound interest by creating a simple model in Excel that shows the growth of your investment.
Compound interest on the other hand means that interest is paid or charged on the principal. Compound interest is a great thing when you are earning it. Compound interest or interest on interest is calculated with the compound interest formula. Here is the formula for finding the compound interest A P 1 rn nt A value after t periods P principal amount initial investment.