# Accurate Interest Calculator

This calculator calculates the interest amount due between any two dates. In addition to simple interest is supports a dozen compounding periods (did we miss any? :). You can also enter negative interest rates.

Because this calculator is date sensitive, it is a suitable tool for **calculating the interest owed on a debt**. You can use it to calculate accrued interest from any point when the balance is known. *More details below the calculator*

Related: If you need to calculate interest for a series of **payments, investments (deposits) or withdrawals**, then you should use this Future Value of an Annuity Calculator.

### Information

## Compound Interest

Compound interest means that interest gets paid (or is earned) on previously unpaid interest.

To Quickly

Pick a Date

For example, if the interest rate is 2% and you start with $1,000 after the end of a year, you'll earn or owe $20 in interest (using annual compounding). Then at the end of two years, assuming there have been no withdrawals (or payments) you earn $20.40, not $20. The previous period's interest earned interest as well.

This pattern is called compounding, and it repeats as long as the money stays invested, or the debtor owes on the debt.

If you are an investor, you want to compound interest. If you are a debtor, you want to avoid it, particularly if you ever miss a payment or a payment is not enough to cover the interest due.

## Simple Interest

Per Dictionary.com simple interest is "interest payable only on the principal." Interest is never earned or collected on previous interest.

Using the above example, if the interest rate is 2% and you start with $1,000 after the end of a year, you'll earn or owe $20 in interest. Then at the end of two years, assuming there have been no withdrawals (or payments) you earn another $20.00, (not $20.40). The previous period's interest does NOT earn interest.

### Other details

You may select 360, 365, or 366 days in a year. The "Days In Year" option only impacts the interest calculation for simple interest or when the calculator is set to daily compounding, or when the time between the two dates includes a fractional or stub period. What's a fractional period? A fractional period incorporates the odd days "leftover" that are not numerous enough for another compounding period. If compounding is set to "Monthly" and the dates are set to March 15 and April 20, then there are five odd days and those 5 days create the fractional period (in this case, a fractional month). **Fractional periods can lead to some strange results when compounding interest. It is possible for the interest calculation to result in a larger amount for a less frequent compounding frequency than for a more frequent compounding frequency.**

You can use this online interest calculator as a:

- apy calculator
- daily interest calculator
- investment interest calculator
- loan interest calculator
- negative interest rate calculator
- savings account interest calculator

As a side benefit to this calculator's date accuracy, you can use it for date math calculations. That is, given two dates, it will calculate the number of days between them, or it will find the date that is "X" days from the first date.

Enter an amount and a nominal annual interest rate.

Date Math: The number of days between the dates will get calculated when you change either date. If you enter a positive value for the number of days, the end date will be updated. If you enter a negative value for the number of days, the start date will be updated.

The above means you can calculate interest for a specific number of days and not worry about what the dates are. If you need to know the interest for 31 days, then enter 31 for the number of days and don't worry about the dates.

Set the compounding and days-in-year. Click "Calc." Interest and future value are calculated (FV is starting amount plus the interest.) Depositors should use the **Annual Percentage Yield ( APY)** calculation for comparing deposit accounts. It is the rate institutions must quote in the US for interest-bearing accounts. The Consumer Financial Protection Bureau defines APY in the Truth-in-Savings Act.

Interest may be calculated based on a unit of time, say a month. This is known as **"Periodic Interest"** In that case, a month's interest is always the same for the same interest rate and same principal balance regardless of the length of the month. Given $10,000 principal and an interest rate of 6.75% the interest will be the same for February as it is for March. Note if you select a periodic method such as "weekly", "biweekly" etc., and if the dates enter do not equate to a number of full periods, then interest will be calculated for the fractional period by counting the days and calculating simple interest. This generally results in 1/2 a month's interest being less than 1/2 of a full month's interest when using monthly compounding.

There is also **"exact day interest**." Interest is calculated based on the number of days. In this case, the amount of interest will be different for February and March. Set compounding to "continuous", "daily" or "simple" for daily interest calculations.

## Comments, suggestions & questions welcomed...