Simple interest pays interest only on the original principal. Compound interest pays interest on interest — which is why Einstein supposedly called it the eighth wonder of the world.

The difference grows dramatically with time. $10,000 at 8% for 30 years is $34,000 simple, but $100,627 compounded monthly. Add even small monthly contributions and the gap widens further.

Always check the after-tax and inflation-adjusted numbers. A 10% nominal return at 3% inflation and 20% tax is closer to 5% real — still good, but a long way from the headline figure.