If you invested $10,000 at 5% simple interest for 10 years, you would receive $500 in interest every year, for a total of $5,000 in earned interest at the end of year 10. This would make your total of ...

While some might argue that compound interest is the most powerful force in the universe, it is undoubtedly one of the most powerful financial forces on Earth. Understanding how compound interest ...

Elvis Picardo is a regular contributor to Investopedia and has 25+ years of experience as a portfolio manager with diverse capital markets experience. Suzanne is a content marketer, writer, and ...

Daniel Jassy, CFA, is an Investopedia Academy instructor and the founder of SPYderCRusher Research. He contributes to Excel and Algorithmic Trading. Compound interest is interest that's calculated on ...

With close to a decade of writing and editing experience, Maisha specializes in service journalism and has produced work in the lifestyle, financial services, real estate, and culture spaces. She uses ...

What these two processes share is baked into the math of each. In fact, in that respect, they're nearly identical. They both involve some stuff (atoms or money) that is either growing or shrinking.

Simple interest calculates earnings or payments based solely on the initial principal, while compound interest grows by calculating interest on both the principal and the accumulated interest over ...