C
General
Compound Interest
Interest calculated on both the initial principal and the accumulated interest from previous periods. When saving, compound interest works in your favour as your money grows faster over time. When borrowing, it means your debt can grow rapidly if left unpaid.
Usage Examples
"A savings account earning 7% compound interest will grow R10,000 to R14,025 in five years without additional deposits."
"Compound interest is why paying only the minimum on your credit card can keep you in debt for years."
"Einstein reportedly called compound interest the eighth wonder of the world — it rewards savers and punishes borrowers."