Simple interest is calculated only on your original principal. If you invest $1,000 at 5% simple interest, you earn $50 every year — no more, no less.
Compound interest earns interest on interest. Your $1,000 at 5% compounding monthly grows a little more each year, because each year's interest is calculated on a larger balance.
Over a few years the difference is small. Over 20–30 years it is enormous. That is why starting early matters — model your own growth on our compound interest calculator.