Monthly Interest Calculator
Total investment amount.
Interest Summary
Monthly Interest (Avg)
0
* Average earning per month
Monthly Interest Calculator
Whether you are an investor looking to track your monthly passive income or a borrower wanting to know exactly how much interest you are paying on a loan, our Monthly Interest Calculator is the perfect tool. It allows you to quickly determine the interest earned or payable over a specific number of months, supporting both Simple and Compound interest methods.
What Is Monthly Interest?
Monthly interest is the amount of interest accumulated over a period of one month.
How it works
Most interest rates are quoted annually (Per Annum or p.a.). To find the monthly return, you generally divide the annual return by 12. However, the exact amount depends on whether the interest is calculated as Simple Interest or Compound Interest.
Simple vs Compound Monthly Interest
- Simple Monthy Interest: You earn/pay a fixed percentage of the principal every month. The amount never changes.
- Compound Monthly Interest: The interest you earn is added to your principal (compounded), so the next month you earn interest on a larger amount. This is common in savings accounts and credit card debt.
How to Use This Monthly Interest Calculator
Using our tool is straightforward and requires no financial expertise.
Inputs explained
- Principal Interest: The total amount of money you have invested or borrowed.
- Annual Rate (%): The yearly interest rate provided by your bank or lender.
- Interest Type: Choose 'Simple' for flat rates or 'Compound' for reinvested earnings.
- Time Period: Enter the duration in months (e.g., 6 months, 18 months).
Formula for Monthly Interest Calculation
For those who like to double-check manually, here are the formulas used.
Simple Interest Formula
Compound Interest Formula
For monthly compounding:
Where r is the decimal annual rate and t is time in years.
Applications of Monthly Interest Calculation
Fixed Deposits (FD)
If you choose a "Monthly Payout" option for your Fixed Deposit, the bank will calculate the simple interest per month and credit it to your account.
Loans and Mortgages
While EMIs constitute both principal and interest, knowing the "Interest Component" helps you realize the true cost of borrowing.
Savings Accounts
Savings accounts often calculate interest daily or monthly but credit it quarterly or half-yearly. This calculator helps you estimate the accrued amount.
Benefits of Using Our Calculator
Instant results
No need for complex spreadsheets. Get your answer immediately.
Accuracy
Calculations are performed precisely using standard financial logic.
Comparison
Easily switch between Simple and Compound modes to see the difference in returns.