Compound Interest
Principle of reinvesting earnings to accelerate capital growth.
Beginner-friendly explanation
Compound interest involves reinvesting earned profits, allowing your capital to grow faster and faster. Example: You earn €10 in profits, reinvest them, and your next profits are calculated on this increased amount.
Intermediate-level insight
Compound interest leads to exponential growth in capital because reinvested earnings generate additional profits over time. Example: With a 10% annual return reinvested each year, €1,000 becomes €2,593 in 10 years.
Advanced perspective
Compound interest, an essential pillar in wealth-building strategies, heavily depends on reinvestment frequency and average return rate. It's particularly effective in staking, lending, or algorithmic trading strategies. Example: A daily auto-compounding staking strategy provides a higher real annual yield than simple annual returns.
Trading Basics
compound interest, reinvestment, exponential growth, staking, yield, auto-compounding