What is Compound Interest?

Compound interest means your investment earns interest — and then that interest also earns interest. Over time, this creates powerful growth.

Example:

If you invest $1,000 at 10% annual interest, compounded yearly:

• After 1 year: $1,100
• After 2 years: $1,210
• After 3 years: $1,331
• After 10 years: $2,593.74

Why it matters:

The longer you leave your investment, the faster it grows. Compound interest is a key principle behind smart investing.

Try the calculator below and see the results for yourself!