Steven Nickolas is a writer and has 10+ years of experience working as a consultant to retail and institutional investors. Suzanne is a content marketer, writer, and fact-checker. She holds a ...

Simple interest applies a fixed rate, meaning that the interest remains the same for the lifetime of the loan or account. Compound interest, however, is calculated on your principal amount ...

It all comes down to one elementary mathematical principle: compound interest. Compound interest occurs when the interest that accrues to an amount of money in turn accrues interest itself.