Compound vs Simple Interest
Understand how compounding accelerates wealth vs flat simple interest on deposits and loans.
| Factor | Compound Interest | Simple Interest |
|---|---|---|
| Formula | FV = PV(1+r)^n | SI = P×R×T/100 |
| Growth curve | Exponential over time | Linear |
| Used in | FD, MF, savings reinvested | Some short-term loans/deposits |
Verdict: Compound interest is the foundation of long-term investing — even a 1–2% rate gap compounds massively over 15–20 years.
📖 Read the full guide: Compound vs Simple Interest — detailed blog · Finance calculators guide