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What is compound interest?

InvestingWarren Team

Quick answer

Compound interest is the effect of earning interest on both your original principal and on the interest you've already accumulated. Over decades, it produces exponential growth.

$10,000 invested at 7% growing to $76,000 over 30 years.
$10,000 invested at 7% growing to $76,000 over 30 years.

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