"The Snowball Effect: How Compound Interest Works Magic on Your Investments"

• Background: Compound interest is a financial phenomenon that’s been powering wealth growth for centuries. By generating earnings on both your initial investment and the interest you've already earned, compound interest builds on itself, creating exponential growth.
• Explanation: Think of compound interest like a snowball rolling down a hill. The more it rolls, the bigger it gets. With each period of compounding, your investment doesn’t just grow—it grows on top of the growth from previous periods.
• Example: Imagine investing $1,000 at a 7% interest rate, compounding annually. In the first year, your money grows to $1,070. By year two, interest is calculated on $1,070, bringing it to $1,144.90. Over time, this effect magnifies, illustrating the advantage of starting early.

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