Compound interest is interest earned on both your original money and the interest it has already earned.
Over long periods the effect snowballs: money growing 7% a year roughly doubles in about 10 years. The same math works against you on debt you don't pay off.
Why it matters to you
Starting to save early matters more than the exact amount, because compounding needs time.
FAQ
What is Compound interest?
Compound interest is interest earned on both your original money and the interest it has already earned.
What is the rule of 72?
Divide 72 by the yearly growth rate to estimate how many years it takes money to double. At 6%, about 12 years.
