Simple vs Compound Interest Calculator

Use our Simple vs Compound Interest Calculator to see how much more your money grows when interest earns interest: both balances after any time, or how long it takes compounding to pull ahead by an amount you choose.

Simple interest is worked out on the original principal only, so the balance grows in a straight line: $10,000 at 5% earns $500 a year and reaches $15,000 after 10 years (for simple interest on its own, in days or between two dates, use our Simple Interest Calculator). Compound interest is added to the balance — yearly, every six months, quarterly, monthly, weekly or daily — and then earns interest itself. Compounded monthly, the same $10,000 reaches $16,470.09: $1,470.09 of interest on interest.

The gap starts small and speeds up. After one year it’s only $11.62; it takes 8 years and 5 months to reach $1,000, and after 30 years it’s $19,677.44. The effective annual rate shows what compounding adds to the rate itself: 5% compounded monthly earns 5.12% a year — the APY a savings account quotes.

The figures assume the same rate the whole time and no deposits, withdrawals, taxes or fees, so treat them as an estimate. The same maths works against you on a loan or a card balance. To add regular deposits to a growing balance, use our Investment Calculator.