Investment Calculator
Compare the mathematical difference between Simple and Compound Interest. See how compounding frequency drastically accelerates your wealth.
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Simple vs. Compound Interest
Understanding the difference between simple and compound interest is the foundational secret to building long-term wealth. Our Investment Calculator breaks down the math visually.
Simple Interest
Simple interest is calculated only on the principal amount. You do not earn interest on any of the interest you have already accumulated.
Compound Interest
Compound interest is calculated on both the initial principal and the accumulated interest from previous periods. This creates an exponential growth curve over time.
Why Compounding Frequency Matters
The 'n' in the compound interest formula represents the compounding frequency. The more frequently interest is calculated and added to your balance (daily vs. annually), the faster your wealth grows, because you begin earning interest on that new interest sooner.