Simple growth is well….simple. It basically means a percentage of the original amount is added on at certain intervals.

So if £100 gains 10% simple interest a year, it goes up 10 quid a year forever.

For compound interest the interest is recalculated each year based on the new total! The easiest thing you can do is learn this formula for anything to do with compound growth:

So if you borrowed £400 over 3 years at a 5% rate of compound interest you would end up owing:

400*(1+ 5/100)*3 = 400*(1.05)*3 = 400 x 1.157625 = **£463.05**