Simple against Compound Interest

04 Try it yourself Interactive

Simple and compound, year against year

Set a principal, rate and time. Each step shows what both rules add that year and the gap between the running balances. Note that year one is always a tie, and that the gap grows by more each year — the last line gives the closed forms for two and three years.

₹1,000 at 10% for 3 years

SI 300 · CI 331 · gap 31

Raise the rate and the gap widens quadratically, since the two-year difference is proportional to R squared rather than to R.

Press Next to work through it one step at a time.

SI so far–

CI so far–

Gap–

CI balance–

step 0 / 0