Simple vs Compound Calculator
Compare simple and compound interest side-by-side on the same investment.
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Simple vs Compound Calculator
Use the formula and worked example below to calculate manually.
Overview
This calculator computes both simple interest and compound interest on the same principal so you can directly compare the difference and understand the power of compounding.
How to use this calculator
- Enter the principal amount.
- Enter the annual interest rate.
- Set the tenure in years.
- The calculator shows simple interest, compound interest (annually), and the difference between the two.
Understanding the inputs & results
Simple interest (SI)
Interest calculated only on the original principal, not on accumulated interest.
Compound interest (CI)
Interest calculated on both principal and previously accumulated interest.
Difference (CI − SI)
The extra wealth generated by compounding over simple interest — the 'interest on interest'.
The formula
SI and CI formulas
SI = P × r × t | CI = P × (1 + r)^t − P
P = principal, r = annual rate (÷100), t = years. CI grows faster than SI because of interest-on-interest. The difference grows larger with longer tenure and higher rates.
Worked example
₹1,00,000 at 10% p.a. for 5 years.
- SI = 1,00,000 × 0.10 × 5 = ₹50,000.
- CI = 1,00,000 × (1.10)^5 − 1,00,000 = 1,61,051 − 1,00,000 = ₹61,051.
- Difference = ₹61,051 − ₹50,000 = ₹11,051.
✓ CI earns ₹11,051 more than SI over 5 years at 10% p.a.