Compound vs Simple Interest Calculator
How much more compound interest earns.
Compare compound interest against simple interest on the same principal, rate, and term. Enter years to see future values under compound vs simple interest.
What this tool does
Enter principal, annual rate, and years. The tool shows future values under compound vs simple interest.
Enter Values
Formula Used
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Disclaimer
Results are estimates for educational purposes only. They do not constitute financial advice. Consult a qualified professional before making financial decisions.
10,000 at 7% for 30 years: simple interest = 31,000 (principal stays, interest accrues flat). Compound interest = 76,123 (interest earns interest). The gap — 45,123 — is the power of compounding. Over long horizons compound dwarfs simple. Over short horizons (1-2 years) the gap is trivial.
A worked example
Try the defaults: principal of 10,000, annual rate of 7%, years of 30. The tool returns 45,122.55. You can adjust any input and the result updates as you type — no submit button, no reload. That's the real power here: seeing how sensitive the output is to one or two assumptions.
What moves the number most
The result responds to Principal, Annual Rate, and Years. The rate and the time horizon usually dominate — compounding means a small change in either reshapes the final figure more than a similar shift in contribution size. Test this by doubling one input at a time.
The formula behind this
Standard compound and simple interest formulas. Everything the calculator does is shown in the formula box below, so you can check the math against your own spreadsheet if you want.
Where this fits in planning
This is a "what-if" tool, not a forecast. Use it to test ideas before committing: what happens if the rate is 2% lower than hoped, what happens if you add five more years. The value is in the scenarios you run, not the single answer you get from the defaults.
What this doesn't capture
Steady-rate math ignores real-world volatility. Actual returns are lumpy; sequence-of-returns risk matters most in drawdown; fees and taxes drag on compound growth; and behaviour changes in drawdowns can reduce outcomes below the projection. Treat the number as one scenario, not a forecast.
Compound vs simple produces two future values based on the inputs provided.
Inputs
This example uses typical values for illustration. Adjust the inputs above to match a specific situation and see how the result changes.
Sources & Methodology
Methodology
Standard compound and simple interest formulas.
Frequently Asked Questions
When does simple interest apply?
Why does compound pull ahead so fast?
Is compounding always better for savers?
Does compounding frequency matter?
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