what is compound interest ?

Compound interest is the interest  earned on both the initial amount of money and the accumulated  interest from previous periods. It is a concept where the interest you earn or pay grows exponentially over time. This  compounding effect can lead to significant growth in investments or increased costs of borrowing.

e.g if you have $100 and it earns 5% interest each year, you will have $105 at the end of the first year. At the end of the second year, you will have $110.25.