What is 'compound interest' and why is it called 'the eighth wonder of the world'?
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Explanation
Compound interest is interest calculated on the original principal plus all accumulated interest. Over long periods, this creates exponential growth. Investing $10,000 at 7% compounded annually grows to over $76,000 in 30 years without adding a single additional dollar. This is why starting to invest early is so powerful.
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