Total interest on any loan - amortizing, simple or compound, side by side.
Enter details
How to use
Pick the interest type: amortizing (most installment loans), simple, or compound.
Enter amount, annual rate and term in years.
Tap Calculate interest.
Read the total interest and compare all three types in the table below the result.
Worked example
20,000 at 8% for 5 years, three ways:
AMORTIZING INTEREST4,332 USD
Simple interest: 8,000 USD
Compound (yearly): 9,387 USD
Amortizing monthly payment: 405.53 USD
Amortizing costs the least because every payment shrinks the balance that interest is charged on.
Common questions
Which type do real loans use?
Most installment loans - mortgages, car and personal loans - are amortizing. Card balances compound; some short-term loans quote simple interest.
Why is amortizing cheaper?
Each payment reduces the balance, so later interest is charged on less money. Simple and compound interest keep growing on the original or growing amount.
Does compounding frequency matter?
Yes - daily or monthly compounding grows faster than the yearly compounding shown here.
