Compound Interest on $500 at 7% for 5 Years

$500 invested at 7% annual compound interest for 5 years grows to $701.28. That is $201.28 in interest earned on top of your original $500 — a 40.3% total return. Compound interest is called the "eighth wonder of the world" because interest earns interest, creating exponential rather than linear growth over time.

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