Principal Growth Calculator

How to Use This Calculator

1. Enter your initial principal amount (the amount of money you're investing)
2. Input the annual interest rate (as a percentage, without the '%' sign)
3. Specify the number of years you plan to invest
4. Select whether you want to calculate simple interest or compound interest
5. Click the "Calculate" button to see the growth of your investment

Understanding the Terms

The calculator shows several important metrics:

• Initial Principal: The amount you started with
• Final Amount: The total amount after interest has been applied
• Interest Earned: The total amount of interest accumulated over the period
• Growth Rate: The percentage increase from your initial investment

Simple Interest vs. Compound Interest

Simple Interest is calculated only on the principal amount. It doesn't compound - the interest earned each year doesn't earn additional interest.

Compound Interest is calculated on the principal amount and also on the accumulated interest of previous periods. This means your investment grows faster over time, as the interest earns interest.

Example Usage

Suppose you invest $10,000 at a 5% annual interest rate for 5 years:

With simple interest, your final amount would be $12,500 ($10,000 × (1 + 0.05 × 5))

With compound interest, your final amount would be $12,762.50 ($10,000 × (1 + 0.05)^5)