Simple vs Compound Interest for bank account - Example please?

[KittenKong]

If I'm reading the TMB page right as to the current Quick interest rate, I expect when you made your last deposit it was paying 3% at the time for a 12 month deposit but it's down to 2% now.

That's possible. I do get 3%. Rates can change, of course.

I mentioned it here because the interest is paid in advance, making it better than other ways of receiving interest.

[EmptyHead]

I have no idea if my account is simple or compound. I am such a diddie.

[WorkingTourist]

It’s probably worth mentioning (to answer the OP, although a little late) that you can convert a compound interest rate to the effective simple interest rate.

In the original example we get 2.5% compounded.

Each month our amount increase by 2.5%/12 = 0.2083333…%.

That means after one month we have 1.00283333… times our principal, and after two month we increase it again by this amount (i.e. multiply again by 1.00283333…), repeat for 12 months, so we end up with: 1.00283333…¹² ≈ 1.025288.

Or in other words, 2.5% compounded monthly is about the same as 2.5288% as a simple interest rate.

We can also go from a simple interest rate to the effective compounded rate, but this is slightly more involved.

[Rancid]

“Compound interest is the eighth wonder of the world. He who understands it, earns it ... he who doesn't ... pays it.”
― Albert Eistein