Have you ever experience the power of compound interest?

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Profit is what all of us look out for every business or investment and the only way to maximize it is where compound interest comes in. compound interest is one of the most powerful tool or force to enable us maximize profit.

The only way for investors to earn profit with little or no effort is with compound interest, so it’s ideal for one to start compounding his/her interest because that’s the only way to earn it and investors have to continuously reinvest the returns. Without taking advantage of compound interest there’s every possibility that investors will be bound to lose out on interest over time.

So you may be wondering how it works and what it really is
It’s really simple, compound interest can also be referred to as what we call interest on interest and it usually involves you adding an interest that you have earned into an investment to the sum invested initially to earn a bigger profit.

A brief example on how compound interest is created
There’s a way in which traders get big profits and what they do is, after claiming staked rewards, they reinvest them into staking again, increasing the amount staked and thereby having a great increase in the amount to be claimed in the future rewards and that is how compound interest is created.
And the compound interest itself is actually more profitable to get profits from than simple interest where the interest gained is not added or combined to the initial amount.

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Mathematical Example
Let’s say you invest the sum of $5,000 in a savings account with the annual interest being 5%, in one (1) year you are bound to earn $250 on the initial deposit of $5,000. So in total your balance is now $5,250.

In two (2) years, since your balance is now $5,250 your interest to earn will now be $262.50 at the end of the second year making your balance $5,512.50. Your account balance will grow increasingly over time as you earn on interest and this is thanks to compound interest.

With compound interest, you are expected to reach your goals successful because it allows you to use less of your money and the earlier you start the more time your money will get to grow.

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