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About this tool
Compare simple and compound interest on the same principal, rate and period, with a year-by-year table and the exact rupee gap.
This comparator runs the same principal, rate and period through both interest formulas — simple interest as P(1 + rt) and compound interest as P(1 + r/m)^(mt) — and reports the rupee gap between them. It supports annual, half-yearly, quarterly, monthly and daily compounding, states the effective annual rate that each frequency produces, and gives the exact doubling period under each method: 1/r for simple interest and ln 2 / ln(1 + EAR) for compound.
Open Simple vs Compound Interest Comparator on AltFTool — it loads instantly in your browser.
Add your input to the workspace.
Adjust the options until the result looks right.
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Maturity value and interest earned side by side, plus the exact difference.
Choose annual to daily compounding and see the effective annual rate it produces.
The gap for every year, so you can see when compounding starts to matter.
Simple interest is calculated only on the original principal, so it adds the same amount every year. Compound interest is calculated on the principal plus the interest already credited, so each year's interest is larger than the last. On Rs 1,00,000 at 10% for 10 years the difference is Rs 59,374 — Rs 2,00,000 against Rs 2,59,374.
Simple interest is SI = P x r x t, giving a maturity value of P(1 + rt). Compound interest gives A = P(1 + r/m)^(mt), where m is the number of times a year the interest is added. Set m = 1 and the two differ only by the interest that compounding earns on earlier interest.
For a saver, yes, once at least one compounding period has passed. Inside the first period compound interest is fractionally behind, because (1 + r)^t is less than 1 + rt when t is under one year. For a borrower the position reverses — a compounding loan costs more than a simple-interest one at the same rate.
At simple interest the answer is exactly 1/r years, so 10 years at 10% and 20 years at 5%. At compound interest it is ln 2 divided by ln(1 + effective annual rate), which at 10% compounded annually is 7.27 years — nearly three years sooner.