How Compound Interest Works
The formula for compound interest is P(1 + r/n)^(nt), where P is the initial principal balance, r is the interest rate, n is the number of times interest is compounded per time period and t is the number of time periods.
Even small monthly contributions can lead to massive growth over long periods of time. This is often called the "eighth wonder of the world" because of its ability to multiply wealth exponentially.
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