$500 Grows To $1,700 (Simple Interest)
$500 at 12% simple interest for 20 years grows to $1,700.00.
$1,700.00
Final Amount
$1,200.00
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 $500 at 12% grow to over 20 years?
$1,700.00 (Simple Interest), earning $1,200.00 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.