You might have heard people use the term compound interest, but if you can’t answer the question “What is compound interest?” then you’re missing out on how compound interest affects your finances.

What these two processes share is baked into the math of each. In fact, in that respect, they're nearly identical. They both involve some stuff (atoms or money) that is either growing or shrinking.

Once a principal balance earns interest, that interest becomes a part of the principal and continues to earn more interest—that is the magic of compounding. What Is Compound Interest? How Does It Work ...

Elvis Picardo is a regular contributor to Investopedia and has 25+ years of experience as a portfolio manager with diverse capital markets experience. Suzanne is a content marketer, writer, and ...

Understanding the concept of compound interest is crucial for anyone looking to grow their wealth. Unlike simple interest, ...

Compound interest is often considered a wonder of the world, and this marvel can do wonders for your investment accounts over the long term. When your interest compounds, it means you’re earning a ...

Earning interest remains one of the cornerstones of investing and lets you earn passive income by putting your money into interest-bearing securities or accounts. Compound interest allows you to ...

With more than 15 years of experience crafting content about all aspects of personal finance, Michael Benninger knows how to identify smart moves for your money. His work has been published by Intuit, ...

Compound interest is the interest earned on money that has already earned interest. Compound interest helps your money grow faster, with no additional investment on your part. Many or all of the ...