Compound interest is more advantageous than simple interest because it allows for the accumulation of interest on both the principal amount and the interest earned over time. In simple interest, interest is only earned on the principal amount, while in compound interest, the interest earned is added to the principal amount and then interest is earned on the new, higher amount. This leads to a compounding effect where the interest earned increases over time, resulting in a larger total return on investment. Additionally, compound interest is commonly used for long-term investments such as retirement funds and savings accounts, where the power of compounding can significantly increase the final amount earned.