Enter an amount, a rate and a period to see the interest and the final balance, with interest charged only on the original amount.
This is arithmetic on a rate held constant for the whole period. Real returns vary, and taxes and fees are not included.
Final balance
Below twelve months simple interest comes out ahead, because the two regimes define an annual rate differently: compound uses the effective rate, simple the nominal one. They meet at one year, and compounding pulls ahead from there. Compound interest
Tap or hover a bar for the exact figures. Scroll sideways to see the whole period.
| Year | Contributed | Interest | Balance |
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| Month | Contributed | Interest | Balance |
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Simple interest adds the same amount every period, because it is always a percentage of the original sum. Ten thousand at 6% a year earns 600 in the first year, 600 in the tenth, and 600 in the thirtieth. Nothing accelerates, which is exactly what distinguishes it from compound interest.
That makes it easy to reason about and easy to verify — you can check the arithmetic in your head — and it is why it survives in short-term contracts and penalty clauses where predictability matters more than precision about growth.
For a few months the two regimes are practically the same, which is why short contracts can use either without much consequence. Past a year the gap opens, and over decades it becomes the whole story: the same 10,000 at 10% reaches 40,000 under simple interest and passes 170,000 under compound.
The comparison under the result shows both figures for whatever you enter, so the difference is visible rather than theoretical.
Interest equals principal × rate × time: I = P·i·n. The interest is always charged on the original amount, never on interest already earned, so the balance grows by the same amount every period and the line is straight.
What the interest is charged on. Simple interest always applies to the original amount; compound interest applies to the balance, which already includes earned interest. Over one year the difference is negligible; over thirty it is most of the result.
Short-term arrangements, mostly: some personal loans, late-payment penalties, certain government bonds and many informal agreements between people. Anything held for years — savings, mortgages, investments — is almost always compound.
Because the two regimes define an annual rate differently. Simple interest uses the nominal rate, so 12% a year means exactly 1% a month. Compound interest uses the effective rate, so 12% a year means 0.9489% a month. Below twelve months the higher monthly rate wins; at one year they meet, and after that compounding pulls ahead.
Not here, and deliberately so. Simple interest with periodic deposits is not a real financial instrument: each deposit would need its own separate time count, and the result would be an invention dressed up as an answer. If you are making regular contributions, compound interest is the calculation you want.
No. The calculation runs entirely in your browser and there is no server to send anything to. The amounts you type are never transmitted or saved.
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