What is compound interest and why does it matter?

Read about interest rates in the NIE supplement: Focus on Finance. Then use the compound interest calculator to discover how much investments can grow. What is compound interest? Why does it matter?

SS.912.FL.3.3:Compare the difference between the nominal interest rate which tells savers how the dollar value of their savings or investments will grow, and the real interest rate which tells savers how the purchasing power of their savings or investments will grow.

SS.912.FL.3.4:Describe ways that money received (or paid) in the future can be compared to money held today by discounting the future value based on the rate of interest.