Simple & Compound Interest Calculator
Work out how much interest (or profit) a deposit earns — or a loan costs — using simple or compound interest.
Updated
For information only — not financial, tax or legal advice. Verify rates and figures with your bank, FBR or another official source before making decisions.
Formula
Simple: I = P × R × T ÷ 100
Compound: A = P × (1 + R ÷ (100 × n))^(n × T)
P = principal, R = annual rate, T = years, n = compounding periods per year. Compound interest earns interest on previous interest.
Examples
Rs 5 lakh at 12% for 3 years, simple
Interest: Rs 180,000.00 · Total: Rs 680,000.00
Rs 5 lakh at 12% for 3 years, monthly compounding
Interest: Rs 215,384.39 · Total: Rs 715,384.39
Rs 10 lakh at 10% for 5 years, yearly compounding
Interest: Rs 610,510.00 · Total: Rs 1,610,510.00
Important information
- Profit on Pakistani bank deposits and National Savings certificates is generally subject to withholding tax, so your net return is lower.
- Islamic banks pay a profit share rather than fixed interest; the expected rate can change.
Frequently asked questions
What is the difference between simple and compound interest?
Simple interest is calculated on the original principal only. Compound interest is calculated on the principal plus interest already earned.
Which compounding frequency is best for savers?
More frequent compounding (monthly vs yearly) earns slightly more at the same annual rate.
What is the rule of 72?
A quick estimate: years to double ≈ 72 ÷ annual rate. At 12%, money roughly doubles in 6 years.
Is profit from banks taxed?
Yes, withholding tax usually applies to profit on debt; the rate depends on current law and your filer status.
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