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Simple vs Compound Interest Calculator
Result
Chart
Show formula & working
Simple interest = P × r × t · Compound interest = P × ((1 + r ÷ m)m × t − 1)
Details
How this works
Simple interest is paid only on the original amount; compound interest is also paid on interest already earned.
Over short periods the difference is small; over decades compounding dominates.
Frequently asked questions
Where is simple interest used?
Some short-term loans, gold loans with bullet repayment and certain bonds that pay out interest rather than reinvest it.
Does paying out interest mean simple interest?
In effect yes — if interest is withdrawn, the balance does not compound.