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The Power of Compound Interest: Building Wealth Over Time

Compound interest is often called the "eighth wonder of the world" because of its ability to grow wealth exponentially over time. It works by earning interest not just on your initial investment, but also on the accumulated interest from previous periods.

The key factors in compound interest are the rate of return, time, and consistency. Even small differences in the annual return can lead to significant differences in the final amount over long periods. This is why starting early and staying invested is so powerful.

For example, investing $500/month at a 7% annual return would grow to over $500,000 in 30 years. The same investment at 5% would only reach about $400,000. Our calculator helps you visualize these differences and plan your investment strategy accordingly.