📚 Simple vs. Compound Interest
🔵 Simple Interest
You earn interest ONLY on your original investment.
Formula: Principal × Rate × Time
Example: Invest $10,000 at 7% for 30 years = earn $700/year every year.
🟢 Compound Interest
You earn interest on your original investment PLUS all the interest you've already earned.
Your money snowballs. Interest earns interest earns interest...
Example: Invest $10,000 at 7% for 30 years = earn more each year as the balance grows.
Real Example: $10,000 invested at 7% for 30 years
Simple Interest
$31,000
+$21,000 total gain
Same $700 every year
Compound Interest 🏆
$76,123
+$66,123 total gain
Growing amount each year
💡 Compound interest earns you $45,123 MORE — that's 2.5x the money!
This is why Einstein allegedly called compound interest "the eighth wonder of the world."