Compound / Simple Interest Calculator
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Comparing Simple and Compound Growth
Simple interest is calculated on the original principal, while compound interest allows earlier interest to remain in the balance and earn further interest. This calculator lets you compare those models while considering the starting amount, time period, compounding frequency, monthly additions, and optional rate changes.
The projection is a mathematical illustration rather than a forecast of market performance. Real returns may be reduced by fees, taxes, inflation, withdrawals, or changing rates. Compare the final value with the total amount contributed and consider its purchasing power, not just the headline percentage growth.
What is the main difference between simple and compound interest?
Simple interest applies the rate to the original principal, whereas compound interest applies it to the principal plus accumulated interest according to the selected compounding schedule.
How do monthly contributions affect the result?
Contributions increase the balance over time, and contributions made earlier generally have more time to earn interest. The timing assumption matters when comparing projections.
Does more frequent compounding always create much higher growth?
More frequent compounding can increase the effective return for the same nominal rate, but the difference usually becomes smaller as the frequency increases. Fees and the actual rate may matter more.
Are calculated investment returns guaranteed?
No. The result follows the assumptions entered and does not account for every market movement, tax, fee, inflation effect, or withdrawal decision.