SESKStuff Everyone Should Know
SESK: Stuff Everyone Should Know · sesk.info/dad-compound-defined

What is compound interest?

Interest you earn on interest.

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  1. A flat fee the bank charges yearly
  2. Interest paid only on your first deposit
  3. Interest you earn on interest ✔

Why: With compound interest your earnings are added to your balance and then earn interest too. The longer you leave money alone, the faster it grows.

Huh, didn't know that: Investor.gov: $100 earning 5% a year grows to almost $340 in 25 years with no deposits.

The dad joke
Compound interest is the only kind of pile-on that I am happy about.
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References

Answer: Interest you earn on interest. With compound interest your earnings are added to your balance and then earn interest too. The longer you leave money alone, the faster it grows.

  1. Investor.gov: What is compound interest? www.investor.gov/additional-resources/information/youth/teachers-classroom-resources/what-compound-interest
    Compound interest is the interest you earn on interest.
    Checked 2026-10-10.

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