Simple interest is calculated only on the principal amount, while compound interest is calculated on the principal amount plus any accumulated interest. Compound interest leads to much faster growth over time because your interest starts earning interest too.

The more frequently interest is compounded (e.g., monthly vs. annually), the faster your money grows. This is because interest is added to your principal more often, allowing it to start earning interest sooner. Even small differences in compounding frequency can lead to significant differences over long periods.

While this calculator uses a fixed interest rate, which is typical for savings accounts or bonds, you can use it to get an *estimate* for investments with an expected average annual return. However, actual returns for stocks and mutual funds are not guaranteed and fluctuate, so treat these results as projections rather than certainties.

You can still use the calculator! If you have no initial deposit, enter '0' for 'Initial Deposit'. If you don't make regular contributions, enter '0' for 'Monthly Contribution'. The calculator will then show you the growth based on just one of those factors, or just the initial deposit if only that is provided.