Simple vs Compound Interest Calculator — Side-by-Side, Year by Year

How to use the simple vs compound interest calculator

1. Enter the Principal, the amount you start with.
2. Enter the Interest rate (per year).
3. Enter the number of Years (whole years).
4. Choose how often interest is added under Compounding: Yearly, Half-yearly, Quarterly, Monthly or Daily.
5. Pick your currency, then compare the two totals and the extra earned from compounding. The chart and table show both for every year.

What it does and when to use it

Simple and compound interest start out almost the same and then pull apart. This calculator shows that gap clearly, which makes it useful for:

• Learning or teaching how compounding works, with real numbers.
• Comparing two savings products, one that adds interest to the balance and one that pays it out.
• Seeing why starting to save early matters, by changing the years.
• Understanding why debt that compounds is so expensive.

For more options, such as regular deposits, use the Compound Interest Calculator. To see what the final amount will be worth after inflation, try the Inflation Calculator. For the yield of a savings account, see the APY Calculator.

How it works

With principal P, yearly rate r (as a decimal), years t and compounding k times a year:

• Simple interest total = P × (1 + r × t)
• Compound interest total = P × (1 + r ÷ k)^(k × t)
• Extra from compounding = compound total − simple total

Simple interest grows by the same amount every year, so it draws a straight line. Compound interest grows by a slightly larger amount each year, so its line curves upwards. The calculation runs in your browser.

Worked examples

₹1 lakh at 10% for 10 years, compounded yearly.

• Simple interest total: ₹2,00,000.00 (₹10,000 of interest every year)
• Compound interest total: ₹2,59,374.25
• Extra from compounding: ₹59,374.25

The same, compounded monthly. The compound total rises to ₹2,70,704.15, and the extra from compounding is ₹70,704.15.

A short term. $1,000 at 5% for 3 years gives $1,150.00 simple and $1,157.63 compound, an extra of $7.63. Over a short term the difference is small. That is why compounding is mostly a long-term effect.

Limits and tips

• Years are rounded to whole years.
• The rate stays the same throughout, and no money is added or taken out.
• Tax on interest is not included.
• Simple interest here is the textbook kind. Loans described as “simple interest” usually charge interest on the remaining balance, which works like the Amortization Schedule.