Compound interest occurs when interest is added to the principal and participates in later interest calculations. With simple interest, the calculation uses the initial principal. This difference describes how interest accumulates; it does not, by itself, separate saving from investing.
Without additional deposits and with a constant rate per period, the formula is FV = PV × (1 + i)^n. The result depends on the principal, rate and number of periods. A low rate over more years does not always exceed a higher rate over fewer years.
The formula does not guarantee an actual outcome. Changing rates, withdrawn interest or costs change the scenario. The calculator lets you compare explicit assumptions with monthly deposits; it excludes losses, inflation, taxes and fees.
Source: Finanzas para Todos: simple and compound interest. Checked on .