what is compound interest 
compound interest is interest that applies not only to the initial principal of an investment or a loan but also to the accumulated interest from previous periods in other words compound interest involves earning or owing interest on your interest the power of compounding helps a sum of money grow faster than if just simple interest were calculated on the principal alone and the greater the number of compounding periods the greater the compound interest growth will be for savings and investments compound interest is your friend as it multiplies your money at an accelerated rate but if you have debt compounding of the interest you owe can make it increasingly difficult to pay off investopedia julie bang