Compound Interest Calculator

Algebra 1 · Axiom Academy

Money that earns interest on its interest doesn't just grow — it accelerates. Put it in your hands. You invest 1,000 at 5% a year . With simple interest you earn 5% of the original 1,000 every year — forever. With compound interest you earn 5% of everything you have so far , so last year's interest starts earning too: Drag the sliders. Watch two stacks of money grow side by side — one paid simple interest, one compounded — and feel the gap open up as you turn up the principal, the rate, or the years. Both start at the same place. Hit Play and watch 30 years roll by: simple interest climbs in a straight line, but compound interest curves upward — each year's gain is bigger than the last, because it earns on a bigger balance. When does compounding really pay off? Here's the real saver's question: how long do you have to leave it alone for compounding to matter? Drag the horizon and watch the extra dollars — almost nothing at first, then it takes off. Same 1,000 , same 5% — but simple interest adds a flat 50 every year, while compound interest grows on a growing balance. The exponent in P(1+r)^t is what turns a tiny early edge into 1,822 extra after 30 years. The same exponential engine drives a savings account, a retirement fund, and even how a population or a virus spreads — and with compounding, time is the biggest lever you have.

This is the written version of the interactive lesson above. See the full Algebra 1 course.