How this calculator works
Cumulative deposits retain interest and compound at the credit frequency. Simple deposits pay interest away from the account, so the final principal returned is unchanged. The combined principal-plus-interest output includes all simple payouts and makes the two scenarios comparable without assuming reinvestment. Fractional periods are prorated for simple interest and interpolated exponentially for cumulative interest.
Formula
Cumulative total = P(1+j/m)^(mt). Simple total = P + Pjt. Simple payout per full interest period = Pj/m. Principal returned at simple-deposit maturity = P.
Worked example
$10,000 at 5% simple interest for two years earns $1,000, paid outside the account, with $10,000 principal returned. Compounding annually instead gives $11,025 at maturity, including $1,025 retained interest.
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Frequently asked questions
Does simple-deposit maturity include earlier payouts?
The combined total does, but the maturity-proceeds output returns principal only. Earlier interest payments are shown separately.
Will a fractional final payout be exactly this amount?
The tool prorates simple interest by elapsed model years. Your institution may use actual days, rounding or contract-specific credit dates.
Does cumulative interest assume reinvestment?
Yes. Interest remains in the deposit and earns interest at the same constant nominal rate.