Let time do some of the work
Compound interest means earning interest on your original savings and on interest already added. Time, contributions and the interest rate all affect the result.
What you will learn
Understand the core idea, recognize a useful next step, and notice where this lesson needs more context.
A small example
At a fixed 5% annual interest rate compounded once per year, $100 becomes $105 after one year. If left untouched at that same rate, it becomes $110.25 after two years. This is an illustration, not a product offer.
Understand the assumptions
A calculator uses a chosen rate and schedule. Real investments do not grow at a guaranteed, steady rate. Fees, taxes and inflation can change what your money is worth.
Try this today
Open the growth explorer. Compare 10 years with 20 years using the same contribution. Then set the rate to 0% to see contributions alone.
Keep learning from the source
Read more: CFPB — Compound interest ↗
Rules and individual circumstances vary. Read the source and seek qualified help when a decision needs personal advice.
Mark this lesson complete
Progress has not been checked yet.
Promo codes require all 18 Money Basics lessons—beginner, intermediate, and expert for Lessons 1–6—to be completed and synced to this passkey account. Progress is optional; quizzes and practice responses are not saved.
Not marked complete