Understanding the power of compounding math may seem a bit complex if you are not used to making heavy calculations. You just need to give it the required time. With compounding by your side, you get to reach your financial goals much faster with less effort. All that you need to do is invest regularly and consistently over the long term and watch your corpus grow.
Since the process is automated, you don’t have to spend time to constantly monitor your investment options. One of the primary advantages of this process is that it requires absolutely no intervention whatsoever. The power of compounding is such that it can help you exponentially magnify your return on investments over the long term. To put it more plainly, compounding allows you to earn interest on both the principal and the accrued interest components.
This process is what is commonly referred to as compounding. When the returns on your investment are subsequently reinvested into the same investment option, you get to earn ‘interest on interest’.
