The Magic of Reinvesting Your Earnings
We've already seen that simple interest always calculates earnings on the initial principal. It's constant and predictable.
Compound interest is different: at the end of each period (for example, a year), the interest you earned is added to your principal. In the next period, you'll earn interest on a larger amount! This "snowball effect" is the most powerful tool for long-term money growth.
Calculate and Compare
Enter your data to see a period-by-period comparison and a growth chart.
Total with Simple Interest
Total with Compound Interest
Period-by-Period Breakdown
| Period | Amount with Simple Interest | Amount with Compound Interest |
|---|
Growth Chart
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