How Compound Interest Actually Works (Visualized)

This video unpacks compound interest — the mechanism most savers assume just means "interest on top of interest," when in reality the loop, the period, and the rate spread do almost all the work. Sections covered: 00:00 What compound interest actually means 01:36 Historical returns and market benchmarks 03:07 How interest gets added to principal 05:21 Using the Rule of 72 06:44 Credit card interest rates explained 08:50 How investment fees compound against you 11:02 Starting early beats starting big 12:39 Why doubling rate beats doubling deposit Sources referenced on screen: U.S. Securities and Exchange Commission, Investor.gov compound interest guidance; S&P 500 long-run annualized return of 10.33%; U.S. Treasury Series I Savings Bonds composite rate of 4% (issues May 1–October 31, 2026); Federal Reserve G.19 Consumer Credit release, average credit card interest rate 21% (February 2026); Federal Open Market Committee statement, April 29, 2026 federal funds target range; Federal Reserve Bank of St. Louis age-comparison investor study on early vs. late starters.

Added 2 May 2026