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How to use Simple vs Compound Interest

Enter your principal, interest rate and number of years. The calculator shows simple and compound interest side by side with a year-by-year comparison table.

Frequently asked questions

What is the difference between simple and compound interest?

Simple interest is charged only on the original principal, while compound interest is charged on principal plus accumulated interest, so it grows faster over time.

What are the two formulas?

Simple interest = P × r × t. Compound interest gives A = P × (1 + r)^t. The gap between them widens the longer the money stays invested.

When does compounding matter most?

Over long periods and at higher rates. Early years look similar, but compounding pulls far ahead the longer you stay invested, which is why time is so valuable.

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