Compound interest means earning returns on both your original money and the returns it has already earned.
Simple example
If 10,000 grows by 10% in a year, it becomes 11,000. The next year, 10% growth is on 11,000, giving 12,100.
Why time matters
The longer money compounds, the bigger the effect.
It works against you too
Compound interest also makes unpaid debt grow, which is why paying off high-interest debt matters.
This article is general information, not personal financial advice. Consider speaking with a qualified professional about your situation.
