How Does Compound Interest Work? (Investments, Savings, and More!)

When it comes to investing, time is your friend. Why? Because over time, your investments will tend to grow at compounding rates - that's compound interest. That means the money that your money has already earned makes more money.

This is why Albert Einstein famously said, "Compound interest is the eighth wonder of the world. He who understands it, earns it. He who doesn’t, pays it."

Here’s what you need to know about compounding and how it affects your investments.