Do you know how the interest on your investment calculated ? While the two different basic types of interests, simple and compound, make your money big difference over a long period of time, all investors should be aware of them. Simple interest is calculated only on your principal. Compound interest is calculated on the the sum of your principal amount plus the accumulated interest of previous periods. A famous quote by Einstein “The most powerful force in the universe is compound interest” tells us the power of the compound interest in your investment. Try it yourself using the calculator link below provided from bankrate.com.