How compounding interest works in simple words

Here is how compounding interest works in very simple words even the 6 years old can understand.

Ever heard of compounding interest? 🤔 Let’s break it down in simple words!

Imagine you plant a seed. 🌱 If you water it and give it sunlight, it grows! Now, let’s say that seed represents your money.

When you put money in a bank, they pay you interest—like the sunlight for your seed! 💰 But here’s the magic: you earn interest not just on your original amount, but also on the interest you earn over time.

So, if you earn $10 in interest this year, next year, you earn interest on that $10 too! It’s like your money is working for you while you sleep! 😴✨

The longer you leave it, the more it grows. Time is your best friend in compounding! ⏳

So, start saving early and let compounding work its magic! Your future self will thank you! 🌟

https://youtube.com/shorts/-sia7VoXddQ?feature=shared