compound interest

Simple interest earns interest on interest, compound interest does not.

Compound interest earns interest on both the principal and previously earned interest.

Simple interest grows faster than compound interest.

Compound interest is only used for loans, not savings.

It grows more slowly

It stays the same

It grows faster

It decreases over time

The difference in interest rates

The total amount saved

The time it takes to save

The benefits of investing

$8,000

$12,000

$25, 438

$75,352.47

Compound interest is the interest calculated only on the initial principal and not on the accumulated interest of previous periods. It has no impact on savings.

Compound interest is the interest calculated on the initial principal but not on the accumulated interest of previous periods. It has a minimal impact on savings.

Compound interest is the interest calculated on the initial principal and also on the accumulated interest of previous periods. It has a significant impact on savings as it allows the account balance to grow at an increasing rate over time.

Compound interest is the interest calculated on the accumulated interest of previous periods only. It has a negative impact on savings.

Account 1 - Interest rate 2%, Interest compounded daily

Account 2 - Interest rate 1%, Interest compounded daily

Account 3 - Interest rate 2%, Interest compounded semi-annually

Account 4 - Interest rate 1%, Interest compounded annually

$4

209,004.23

22,938.13

229,381.83

$10,000

$50,000

$158,311.41

$150,000

$520

$560

$563

$600

Interest is calculated once per year

Interest is added to the account every month

You receive simple interest each month

The interest rate changes every month