Calculate Annual Interest Savings Account

How to Use This Calculator

Using our annual interest savings account calculator is simple:

1. Enter the principal amount (the initial deposit or balance in your savings account).
2. Input the annual interest rate (APR) offered by your bank or financial institution.
3. Select the compounding frequency (how often the interest is calculated and added to your account).
4. Click the "Calculate" button to see your annual interest earnings.

The calculator will display your annual interest earnings and show a breakdown of how the interest is calculated based on your inputs.

Formula Explained

The calculation for annual interest from a savings account uses the compound interest formula:

For annual interest, we use n=1 (compounding once per year). The formula simplifies to:

This formula shows that your annual interest is simply the principal amount multiplied by the annual interest rate.

Worked Example

Let's look at an example to understand how the calculation works:

Suppose you have $1,000 in a savings account with an annual interest rate of 2%.

Using the formula:

After one year, you would earn $20 in interest, bringing your total balance to $1,020.

This example shows how simple it is to calculate annual interest from a savings account.