Compound interest — meaning explained

Compound interest: Earnings that start earning their own earnings.

What it means

Your growth gets added to your balance, then that bigger balance grows too. It looks boring for a few years, then it gets ridiculous — which is why starting young matters so much.

Category

Money — part of the free InvestED Academy investing glossary for teens.

See it in action

Practise with real prices and fake money in the market simulator, or start the free course at module one.