Daniel Jassy, CFA, is an Investopedia Academy instructor and the founder of SPYderCRusher Research. He contributes to Excel and Algorithmic Trading. Compound interest is interest that's calculated on ...

Elvis Picardo is a regular contributor to Investopedia and has 25+ years of experience as a portfolio manager with diverse capital markets experience. Suzanne is a content marketer, writer, and ...

Once a principal balance earns interest, that interest becomes a part of the principal and continues to earn more interest—that is the magic of compounding. What Is Compound Interest? How Does It Work ...

Compound interest grows by reinvesting earnings, creating larger interest over time. Increasing compounding frequency (e.g., monthly) can significantly accelerate investment growth. Compound earnings ...