Compound interest is interest calculated on both the initial principal and all of the previously accumulated interest. d3sign / Getty Images The formula for calculating simple interest is ...

The simple interest formula isn't as complicated as the compound formula below. A savings account is an account that earns interest with a financial institution. Let's say you invested $10,000 in ...

But if you borrow money, you'll pay more with compound interest, and the shorter the compounding period, the more you'll pay over time. Understanding these formulas can help you see why it makes ...