$500 Grows To $5,446 (Compound Interest)
$500 at 12% compound interest for 20 years grows to $5,446.28.
$5,446.28
Final Amount
$4,946.28
Interest Earned
How This Works
Simple interest is calculated only on the original principal each year. Compound interest is calculated on the principal plus all previously earned interest — which is why it grows faster the longer money is left invested.
Formula
Total = P × (1 + r/12)ⁿ²ᵟ
Example
$10,000 at 8% for 10 years grows to about $22,196 with monthly compounding, but only $18,000 with simple interest.
Frequently Asked Questions
What does $500 at 12% grow to over 20 years?
$5,446.28 (Compound Interest), earning $4,946.28 in interest.
Why does compound interest grow faster than simple interest?
Compound interest earns returns on previously earned interest too, not just the original principal, so growth accelerates over time.