Use this online calculator if you are borrowing money or you are lending money. This calculator enables you to determine how much interest will be paid or accumulated. To understand the math behind the calculation of compound interest, see the tutorial.
See also: Free Amortization Schedule Calculator
Step 1: Enter the Principal (the amount of money borrowed or to be lent).
Step 2: Enter the Rate (The annual percentage of interest)
Step 3: Enter the length of time in years the money will be borrowed or lent for.
Denise wants to borrow $5000.00 to purchase a used car. She wants to be able find out how much the car will cost her if she borrows the $5000.00 at an interest rate of 8% for 4 years. Thus, she will enter $5000.00 in the column for Principal. She will enter 8 in the column for rate and 4 in the column for years. She will then click calculate. The amount she is actually paying for her $5000.00 is $6802.44. The total amount of interest she will be charged for borrowing the $5000.00 is $1802.44.