Question 1

What is compound interest?

Accepted Answer

Compound interest is interest calculated on both the initial principal and accumulated interest, causing exponential growth.

Question 2

How often does interest compound?

Accepted Answer

Interest can compound daily, monthly, quarterly, or annually. More frequent compounding = faster growth.

Question 3

What is the Rule of 72?

Accepted Answer

Divide 72 by the annual interest rate to estimate the years needed to double your money. E.g., at 8% interest, money doubles in 9 years.

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