Finance Calculators

Choosing the right finance calculator

Loans and mortgages. Use the loan calculator for any fixed-rate loan repaid in equal monthly installments, such as a car or personal loan. Use the mortgage calculator when you are buying a home: it starts from the price and down payment, and can add property tax, homeowners insurance and HOA fees to estimate the full monthly cost. Both show a year-by-year amortization schedule.

Interest. Simple interest is charged or earned on the original principal only, so it grows in a straight line. Compound interest is earned on the principal plus interest already added, so growth speeds up over time. Use the simple interest calculator for short-term loans and notes quoted that way, and the compound interest calculator for savings, deposits and long-term growth with optional monthly contributions.

Return on investment. The ROI calculator compares what you put in with what you got back. Add the holding period to turn the total return into an annualized rate, which makes investments held for different lengths of time easier to compare.

Borrowing, saving and investing at a glance

The same few variables, an amount, a rate and a length of time, drive every calculator here. What changes is the direction the money moves and the question being asked.

Borrowing

A fixed-rate installment loan charges interest each month on the balance still owed, so early payments are mostly interest and later payments mostly principal. The questions that matter are the monthly payment, the total interest, and how the balance falls. On a $20,000 loan at 7.5%, a 5-year term costs $400.76 a month and $4,045.54 in interest, while a 7-year term lowers the payment to $306.77 but raises the interest to $5,768.30. The loan and mortgage calculators make that trade-off visible. The guide to how loan amortization works explains the schedule, and how much house can I afford covers debt-to-income ratios, PITI and PMI.

Saving

Deposits in savings accounts and CDs usually earn compound interest, and banks disclose the annual percentage yield so accounts can be compared on equal terms. $10,000 at 5% compounded monthly grows to $16,470.09 in 10 years with no further deposits. The compound interest calculator projects growth like this, and the guide to simple vs. compound interest shows how far the two methods drift apart over time.

Investing

Investments that can rise and fall do not grow at a fixed rate, so the useful question is usually backward-looking: what did this return? The ROI calculator gives the total percentage and the compound annual growth rate. To project a steady assumed rate forward, the compound interest calculator does the arithmetic, but the result is an illustration rather than a forecast.

Rates on disclosures

Loans and deposit accounts are quoted with different annual rates. Lenders disclose an APR, which includes certain fees and does not compound. Banks disclose an APY, which includes compounding but not fees. Comparing an APR with an APY, or a stated rate with either, can mislead. The guide to APR vs. APY walks through both with worked examples.

Glossary

• Principal. The amount borrowed or deposited, before interest.
• APR (annual percentage rate). The yearly cost of credit, combining the interest rate with certain fees.
• APY (annual percentage yield). The yearly return on a deposit including the effect of compounding.
• Amortization. Repaying a loan through regular payments split between interest and principal.
• PITI. Principal, interest, property taxes and homeowners insurance, the main parts of a mortgage payment.
• PMI (private mortgage insurance). Insurance that protects the lender on many conventional mortgages with less than 20% down.
• Escrow. An account a mortgage servicer uses to collect and pay property tax and insurance bills.
• CAGR (compound annual growth rate). The steady yearly rate that turns a starting value into an ending value over a period.

Other useful calculators

Percentages come up throughout personal finance. The percentage calculator converts a dollar amount to a share of a total, such as a down payment, and the percentage change calculator measures how much a balance or price moved. For interest counted in days, the date difference calculator finds the exact number of days between two dates.

These calculators produce estimates from the numbers you enter. Lender quotes, account disclosures and actual investment results can differ.