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Compound interest means earning interest on your interest. It's the "eighth wonder of the world" according to Einstein (allegedly).
The formula is A = P(1 + r/n)^(nt). Small differences in rate or time create big differences in final value.
Starting early matters enormously. $10,000 at 8% for 40 years = $217,000; for 30 years = $100,000.
Understanding compound interest helps you make better investment decisions and plan for taxes. Use our sip calculator to see how it applies to your situation.
