Compound Interest

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Compound Interest

Compound interest (or compounding interest) is the interest on a loan or deposit calculated based on both the initial principal and the accumulated interest from previous periods.

Compound interest can grow your wealth because it is interest that's earned on top of interest already earned. This concept applies not just to the money saved in your bank account, but on returns earned on your investments too. Investing is one of the most powerful things you can do to build wealth for the long-term.

 

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