Finance Library
InvestingBeginner 4 min read
Compound Interest
The 8th wonder of the world — how money earns money on money.
What it is
Compound interest is the interest you earn on both the original amount you invested and on the interest you've already earned. Each period, the base grows, so the next interest payment is a little larger.
Why it matters
Over long periods, compounding turns small, steady contributions into surprisingly large balances. Time in the market is the single biggest lever you have.
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