Compound interest is a crucial financial concept that can help build wealth over time. It is the process where interest is earned on both the initial principal and accumulated interest. The earlier one starts saving or investing, the greater the benefits of compounding. For example, investing $1,000 at an annual interest rate of 10% will grow to $2,593 in ten years without additional contributions. Compounding works best when investments are made consistently and left untouched for long periods. Understanding compound interest encourages individuals to save early and invest wisely for long-term financial security.
The Power of Compound Interest
