Interest Rate Calculator
Find the interest rate required to grow a principal amount to a target amount over a given time period. This calculator solves for the rate in both simple and compound interest scenarios — useful for comparing investments, loans, and savings goals.
How to Calculate Interest Rate
Compound: r = n × [(A/P)^(1/(n×t)) - 1]
Simple: r = (A - P) / (P × t)
Where: A = final amount, P = principal, t = time in years, n = compounding frequency
Example
If you invest $5,000 and want it to grow to $7,500 in 5 years with annual compounding: r = 1 × [(7500/5000)^(1/(1×5)) - 1] = 8.45% per year. You need an investment returning at least 8.45% annually to reach your goal.
Frequently Asked Questions
What is the difference between simple and compound interest rate?
Simple interest is calculated only on the principal. Compound interest is calculated on the principal plus accumulated interest. For the same growth, the compound rate will be lower than the simple rate because compounding accelerates growth.
How does compounding frequency affect the rate?
More frequent compounding (monthly vs annually) means a slightly lower nominal rate is needed to achieve the same growth, because interest earns interest more often.
What is a good interest rate for savings?
High-yield savings accounts typically offer 4-5% APY. CDs may offer slightly more. For investments, the S&P 500 has historically returned about 10% annually before inflation.
How do I use this for loan rates?
Enter the loan amount as principal, total amount repaid as final amount, and loan term as years. The result shows the effective interest rate you are paying.