$10,000 Grows To $13,000 (Simple Interest)
$10,000 at 6% simple interest for 5 years grows to $13,000.00.
$13,000.00
Final Amount
$3,000.00
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 × t)
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 $10,000 at 6% grow to over 5 years?
$13,000.00 (Simple Interest), earning $3,000.00 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.