Self-managed financial planning

Simple vs compound interest

The same money, the same rate — but compound interest earns on the growing balance, not just the original sum. See how far ahead it pulls over time.

Your investment

Growth over the term

$0
final value — simple interest
$0
final value — compound interest

The difference

Compound vs simple interest

With compound interest, the interest earned is added to the principal, so future interest is earned on an ever-growing balance — hence "compound". With simple interest, the interest is not added back, so it is only ever paid on the original amount invested.

Assumptions