What Is Compound Interest | Mama Mimi Microschool

Compound interest is the interest accumulated from a principal sum and previously accumulated interest, resulting from reinvesting or retaining interest that would otherwise be paid out, and is a key concept in finance and investing. It plays a crucial role in personal finance, investing, and economic growth, and is often discussed in the context of economics and finance. Compound interest is contrasted with simple interest, where previously accumulated interest is not added to the principal amount of the current period, and is a key consideration in choosing the right savings or investment vehicle.