 TITLE: What Is Compound Interest? CONTENT: What Does \"Compound Interest\" Mean?\n-----------------------------------\nCompound interest, or compounding interest, is essentially interest earned on other interest. Each time you add interest to a principal amount, whether on an investment or a loan, that interest—plus the principal—will earn more interest during the next period.\nThe tricky thing about compounding interest is that it can be both good and bad. It's great when interest compounds on an investment and allows your initial contribution to grow more quickly. But when compounding interest is added to a loan or credit card debt, it's not so great because that's now extra money you have to pay back. END