Guide
Understand your Simple vs compound result
Simple interest is calculated from the original principal throughout the term. Compound interest adds earned interest to the balance, allowing later interest to be calculated on a larger amount.
Results are for general information. Review the site disclaimer before using a result for an important decision.
Simple interest grows in equal increments
Simple interest equals principal multiplied by the annual rate and time in years. The interest amount added for each full year remains the same when the principal and rate do not change.
This makes simple interest easy to estimate and useful for understanding products that explicitly use a flat or simple calculation.
Compounding reinvests each period's interest
Compound growth depends on how often interest is added to the balance. Annual, quarterly, monthly, and daily compounding can produce different results at the same nominal annual rate.
The difference from simple interest is often modest over a short period and becomes more noticeable as the rate, frequency, or time increases.
Match the calculator to the product terms
The estimate assumes a constant rate, no withdrawals, and no tax, fees, or additional contributions. Real products may calculate interest using different day-count and crediting rules.
Use the compounding frequency stated in the account or loan documents and compare the final disclosed amount before making a decision.