Comparison Guide
Simple vs. Compound Interest
Compare simple and compound interest to see how your money grows over time. Understand the power of compounding for investments and loans.
The Verdict
Compound interest is vastly superior for investments as your interest earns interest over time. Simple interest is generally preferable when you are the one borrowing money (though most loans use compound interest).
Simple Interest Calculator
Open CalculatorCompound Interest Calculator
Open CalculatorCalculation Basis
Simple Interest CalculatorPrincipal only
Compound Interest CalculatorPrincipal + accumulated interest
Growth Rate
Simple Interest CalculatorLinear (constant amount each period)
Compound Interest CalculatorExponential (accelerates over time)
Best For
Simple Interest CalculatorShort-term personal loans
Compound Interest CalculatorLong-term investments & savings
Common Uses
Simple Interest CalculatorCar loans, some personal loans
Compound Interest CalculatorSavings accounts, mortgages, credit cards