🧠Compound Interest Explained: Simple Examples & Easy Guide for Beginners (2025)
Compound Interest Explained with Simple Examples Compound interest is one of the strongest tools to grow your money. Whether you save in a bank account, invest in mutual funds , or keep money in a digital savings app, compound interest helps your money grow faster than simple interest . Many beginners think it’s complicated, but the idea is very simple: you earn interest on your money AND also on the interest already earned. In this article, we’ll explain compound interest in an easy way, with simple examples anyone can understand. 🔹 What is Compound Interest? Compound interest means your interest keeps increasing because your balance keeps increasing. Every time interest is added, your next interest amount becomes bigger. In simple words: Money grows on money. 🔹 Compound Interest Formula (Easy Version) You don’t need to memorize the full formula. Just understand: Current Amount = Previous Amount + Interest on Previous Amount Every period (month/year), interest is added, and th...
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