What Is Compound Interest?
Let’s break it down with simple visuals.
Start With the Basics
Compound interest = Interest earned
on
your interest. It builds over time.
1
Simple vs Compound
Simple interest grows in a straight line.
Compound interest grows like a curve—faster.
2
A Quick Example
Invest $1000 at 10% annually.
After 1 year: $1100.
After 5 years: $1610—not just $1500!
3
Why It Matters
The earlier you start, the more time compound interest has to work its magic.
4
Real-Life Uses
Compound interest helps grow savings, investments, and even retirement funds.
5
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