Interest Calculator
Work out how much interest you earn on a lump sum in GBP. Choose simple interest or compound interest (compounded monthly).
Simple vs compound interest
Simple interest is calculated only on the original amount. So £10,000 at 5% for 3 years earns £500 per year, giving £1,500 interest in total. Compound interest is calculated on the growing balance (e.g. monthly), so you earn interest on interest and the total is higher over time. Most UK savings accounts use compound interest (often paid monthly or annually).
Frequently asked questions
What is the difference between simple and compound interest?
Simple interest is on the principal only; compound interest is on the principal plus previous interest, so growth is faster.
How do I calculate simple interest?
Interest = Principal × (rate ÷ 100) × time in years. End balance = principal + interest.
Does this work for UK savings?
Yes. Amounts are in GBP. Use it to estimate interest on a lump sum; check your provider for actual rates and terms.
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