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How Compound Interest Grows Wealth

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Created December 23, 2025

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Video Transcript

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Compound interest is money making money on top of money. When you earn interest

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on your initial investment, that interest gets added to your total. Then you earn interest

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on that new, larger amount. This cycle repeats, creating exponential growth over time.

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A simple example: invest one hundred dollars at ten percent annual interest. After year one,

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you have one hundred ten dollars. Year two, you earn interest on the full one

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hundred ten, not just the original hundred. Over decades, this snowball effect

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can turn modest savings into substantial wealth. Time is your biggest advantage.

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