• Understanding the way compound interest works is key to building wealth or avoiding crushing debt. Here's how to make it work for you

    10 days ago - By Business Insider

    The more frequently interest compounds, the faster an overall amount of money accumulates.
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    Compound interest occurs when previously earned interest is added to the principal amount invested or borrowed. It is commonly described as "interest earned on interest."
    Compound interest can work to your advantage as your investments grow over time, but against you if you're paying off debt, like credit cards.
    If you're borrowing money, you want interest compounded as infrequently as possible; if you're investing, you want interest compounded as often as possible.
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