Once a principal balance earns interest, that interest becomes a part of the principal and continues to earn more interest—that is the magic of compounding. What Is Compound Interest? How Does It Work ...

This is an excerpt from Dollar Scholar, the Money newsletter where managing editor Julia Glum teaches you the modern money ...

Compound interest is a means of calculating the potential return from an investment that takes the cumulative effect of interest into account. Compound interest works by factoring in the effect of ...