Simple Interest Calculator

Simple interest is calculated only on the original principal, so it grows linearly. Compound interest is calculated on principal plus accumulated interest, so it grows exponentially. Over one year they are close; over thirty they are not remotely comparable.

Short-term instruments — many car loans, some bonds, and most late-payment penalties. Anything spanning years is almost always compound, which is why quoting a simple rate on a long loan understates its cost.