{"id":64523,"date":"2022-10-12T18:46:03","date_gmt":"2022-10-12T13:16:03","guid":{"rendered":"https:\/\/mudrex.com\/blog\/?p=64523"},"modified":"2024-03-24T16:28:47","modified_gmt":"2024-03-24T16:28:47","slug":"power-of-compounding","status":"publish","type":"post","link":"https:\/\/mudrex.com\/learn\/power-of-compounding\/","title":{"rendered":"Power of Compounding: What is it and How Does it Work?"},"content":{"rendered":"\n<h2 class=\"wp-block-heading has-medium-font-size\" id=\"h-tl-dr\"><span class=\"ez-toc-section\" id=\"TLDR\"><\/span>TL;DR<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul>\n<li><a href=\"https:\/\/mudrex.com\/blog\/difference-between-simple-and-compound-interest\/\">Compound interest<\/a> is a type of interest that is calculated on the initial principal of an investment as well as the accumulated interest of previous periods.<\/li>\n\n\n\n<li>The formula for compound interest is: A = P(1 + r\/n)nt, where A is the final amount, P is the initial principal invested, r is the interest rate, n is the number of times interest has been applied per time period, and t is the number of time periods elapsed.<\/li>\n\n\n\n<li>To earn compound interest, you can either invest a lump sum of money for a long period or periodically invest smaller amounts over a long time. Compounding gives you benefits like faster growth of wealth, higher returns over long periods, etc.<\/li>\n\n\n\n<li>Compound interest has a snowball effect- over time, a small investment grows significantly by compounding. The longer the investment period, the higher the returns.<\/li>\n\n\n\n<li>Some key rules to earning compound interest are starting early, not withdrawing returns too early, finding the right investment instruments, etc. Compound interest instruments are available in cryptos as well. Check out Mudrex Vault to know more.<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\" id=\"h-introduction\"><span class=\"ez-toc-section\" id=\"Introduction\"><\/span>Introduction<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>You\u2019re probably familiar with the term \u201ccompound interest\u201d from your school days. But how much thought have you given to the concept apart from remembering the formula to pass that math test? If it isn\u2019t a lot, it\u2019s probably time that changed. And we\u2019re here to help you achieve financial enlightenment and work towards your financial freedom with the power of compounding.<\/p><div class=\"mudre-content-2\" id=\"mudre-3010800577\"><a href=\"https:\/\/mudrex.go.link\/SY1jU\" aria-label=\"Frame 33 (2)\"><img src=\"https:\/\/mudrex.com\/learn\/wp-content\/uploads\/2025\/10\/Frame-33-2.png\" alt=\"\"  srcset=\"https:\/\/mudrex.com\/learn\/wp-content\/uploads\/2025\/10\/Frame-33-2.png 928w, https:\/\/mudrex.com\/learn\/wp-content\/uploads\/2025\/10\/Frame-33-2-300x76.png 300w, https:\/\/mudrex.com\/learn\/wp-content\/uploads\/2025\/10\/Frame-33-2-768x194.png 768w, https:\/\/mudrex.com\/learn\/wp-content\/uploads\/2025\/10\/Frame-33-2-150x38.png 150w\" sizes=\"(max-width: 928px) 100vw, 928px\" width=\"928\" height=\"234\"   \/><\/a><\/div>\n\n\n\n<p>Albert Einstein is famously known to have said, \u201cCompound interest is the eighth wonder of the world.\u201d And while that might seem like an exaggeration, that quote could not be more true in finance. So without further ado, let\u2019s take a page out of Einstein\u2019s book and gain a better appreciation of the power of compounding.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-is-power-of-compounding\" style=\"font-size:20px\"><span class=\"ez-toc-section\" id=\"What_Is_Power_of_Compounding\"><\/span>What Is Power of Compounding?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The power of compounding basically refers to the interest you earn on your previously accumulated interest. Let\u2019s say you invest a certain amount of money, and it earns interest over a month. Through compound interest, you will now earn interest on your initial investment plus the interest it accumulated over the past month! Why don\u2019t we try to understand this with an example?<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-example-of-power-of-compounding\" style=\"font-size:17px\"><span class=\"ez-toc-section\" id=\"Example_of_power_of_compounding\"><\/span>Example of power of compounding<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Say you and your friend, Chandler, decide to invest \u20b91,00,000 each in the same stock, and this stock gives you 15% interest annually. You plan to withdraw the interest earned every year, while Chandler\u2019s strategy is to re-invest the interest and add it to the initial investment. Let\u2019s see how this would play out in a ten-year period.<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td class=\"has-text-align-center\" data-align=\"center\"><\/td><td class=\"has-text-align-center\" data-align=\"center\"><strong>Initial Investment<\/strong><\/td><td class=\"has-text-align-center\" data-align=\"center\"><strong>Interest Earned After 10 Years<\/strong><\/td><td class=\"has-text-align-center\" data-align=\"center\"><strong>Total Investment Value<\/strong><\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\"><strong>You<\/strong><\/td><td class=\"has-text-align-center\" data-align=\"center\">\u20b91,00,000<\/td><td class=\"has-text-align-center\" data-align=\"center\">\u20b91,50,000<\/td><td class=\"has-text-align-center\" data-align=\"center\">\u20b92,50,000<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\"><strong>Chandler<\/strong><\/td><td class=\"has-text-align-center\" data-align=\"center\">\u20b91,00,000<\/td><td class=\"has-text-align-center\" data-align=\"center\">\u20b9304,555<\/td><td class=\"has-text-align-center\" data-align=\"center\">\u20b9404,555<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p>With the power of compounding, Chandler would\u2019ve earned about \u20b9 1.5 lakhs more than you in ten years. Now, that\u2019s no chump change. So what we can take away from this little example is\u2013 be like Chandler. Use the power of compounding to your advantage!<\/p>\n\n\n\n<p>How did we arrive at these numbers, though? Let\u2019s take a quick look.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-how-to-calculate-compound-interest\" style=\"font-size:17px\"><span class=\"ez-toc-section\" id=\"How_to_calculate_compound_interest\"><\/span>How to calculate compound interest<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>If you\u2019re one of those people who forget formulas right after an exam, no worries. We\u2019ve got your back. Here\u2019s how you calculate compound interest:<\/p>\n\n\n\n<p>A = P(1 + r\/n)<sup>nt<\/sup>, where A is the final amount, P is the initial principal invested, r is the interest rate, n is the number of time interest has been applied per time period, and t is the number of time periods elapsed.<\/p>\n\n\n\n<p>If you don\u2019t want to do all this yourself, you could simply use a compound interest calculator that uses the same formula and does the job for you. All you have to do is enter four values into the calculator:<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-1-principal-amount\"><span class=\"ez-toc-section\" id=\"1_Principal_amount\"><\/span>1. Principal amount:<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>This is the amount you intend to invest<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-2-frequency-of-compounding\"><span class=\"ez-toc-section\" id=\"2_Frequency_of_compounding\"><\/span>2. Frequency of compounding:<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>This is the number of times the interest is compounded per time period.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-3-investment-period\"><span class=\"ez-toc-section\" id=\"3_Investment_period\"><\/span>3. Investment period:<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>This is the number of time periods you intend to invest for. This could be different periods of time, but it is usually calculated in years, as most investments give annual returns.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-4-expected-rate-of-return\"><span class=\"ez-toc-section\" id=\"4_Expected_rate_of_return\"><\/span>4. Expected rate of return:<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>This is the interest rate you expect to receive on your investment. This changes depending on the asset you\u2019re investing in.<\/p>\n\n\n\n<p>Now that we\u2019ve understood how to calculate compound interest, let\u2019s take a look at how the power of compounding applies to your investments.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-how-does-the-power-of-compounding-work-in-investments\" style=\"font-size:20px\"><span class=\"ez-toc-section\" id=\"How_Does_the_Power_of_Compounding_Work_in_Investments\"><\/span>How Does the Power of Compounding Work in Investments?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>When you invest your money, you earn interest on it. In compound interest, you now earn interest on this new amount that includes the interest you previously earned. Long story short, compound interest means that your interest earns you interest.<\/p>\n\n\n\n<p>There are two ways you could go about investing your money to earn compound interest. The first way is to invest a lump sum of money that earns interest over a long period of time. The second way is to periodically invest smaller amounts of money that will add up to a significant amount over time.<\/p>\n\n\n\n<p>Let\u2019s take a look at how the power of compounding works in <a href=\"https:\/\/mudrex.com\/blog\/how-to-invest-in-mutual-funds\/\">mutual funds<\/a> since they\u2019re the \u201cit\u201d thing in investment these days. One reason for this interest in mutual funds is the fact that they take advantage of the power of compounding and generate significant returns over time.<\/p>\n\n\n\n<p>Mutual funds offer a facility called <a href=\"https:\/\/mudrex.com\/blog\/sip-in-cryptocurrency-what-you-need-to-know\/\">SIP\u2013 Systematic Investment Plan<\/a>, which allows you to invest small amounts of money at pre-defined intervals. These investments go on to grow exponentially over time, offering exponential returns.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-benefits-of-compounding-in-a-long-term-investment\" style=\"font-size:20px\"><span class=\"ez-toc-section\" id=\"Benefits_of_Compounding_in_a_Long-Term_Investment\"><\/span>Benefits of Compounding in a Long-Term Investment<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-1-faster-growth\" style=\"font-size:17px\"><span class=\"ez-toc-section\" id=\"1_Faster_growth\"><\/span>1. Faster growth<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Compound interest allows you to grow your wealth by earning you interest on interest. The initial investment multiplies exponentially over time.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-2-ability-to-contribute-regularly\" style=\"font-size:17px\"><span class=\"ez-toc-section\" id=\"2_Ability_to_contribute_regularly\"><\/span>2. Ability to contribute regularly<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>You can make contributions to your initial investment regularly, allowing your money to grow even faster than it would otherwise.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-3-longer-the-investment-higher-the-returns\" style=\"font-size:17px\"><span class=\"ez-toc-section\" id=\"3_Longer_the_investment_higher_the_returns\"><\/span>3. Longer the investment, higher the returns<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>This one is pretty self-explanatory. The longer you allow your investment to earn interest and compound it over the years, the higher your final returns will be.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-4-uncomplicated-to-execute\" style=\"font-size:17px\"><span class=\"ez-toc-section\" id=\"4_Uncomplicated_to_execute\"><\/span>4. Uncomplicated to execute<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>You don\u2019t need to be an expert in the field with extensive knowledge of investments and investment instruments to be able to take advantage of the power of compounding. That said, always <a href=\"https:\/\/mudrex.com\/blog\/glossary\/do-your-own-research-dyor\/\">DYOR\u2013 Do Your Own Research<\/a>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-how-long-should-you-invest-to-get-the-most-compounding-benefits\" style=\"font-size:20px\"><span class=\"ez-toc-section\" id=\"How_Long_Should_You_Invest_to_Get_the_Most_Compounding_Benefits\"><\/span>How Long Should You Invest to Get the Most Compounding Benefits<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The power of compounding works like magic, and we\u2019ve already seen how Chandler took advantage of it to make a small fortune for himself. The only thing is, the power of compounding needs time to work its magic. The longer it has, the better the results are.<\/p>\n\n\n\n<p>When you invest, it is also important to remember that your investment will only give you these exponential results when you re-invest your earnings and add it to your initial investment. Basically, try not to withdraw your profits until the end of your investment period. This allows your interest to compound and grow exponentially. And it\u2019s always best to start investing as early as you can. In case we haven\u2019t said it enough already, the longer you invest your money, the higher your returns will be.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-how-can-compounding-benefits-help-you-save-more\" style=\"font-size:20px\"><span class=\"ez-toc-section\" id=\"How_Can_Compounding_Benefits_Help_You_Save_More\"><\/span>How Can Compounding Benefits Help You Save More?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Have you heard of the snowball effect? If you haven\u2019t, you\u2019re about to. Imagine a snowball rolling down a hill. All those cartoons you watched as a kid should serve as great points of reference. Now, as this snowball rolls further and further down the hill, what happens to it? It grows bigger and bigger.<\/p>\n\n\n\n<p>This is essentially how compounding benefits help you grow your investments. Something that starts off as a small investment grows into a significant amount over time with the power of compounding.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-key-investment-rules-that-enable-power-of-compounding\" style=\"font-size:20px\"><span class=\"ez-toc-section\" id=\"Key_Investment_Rules_That_Enable_Power_of_Compounding\"><\/span>Key Investment Rules That Enable Power of Compounding<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The power of compounding doesn\u2019t work without you playing your part. Here are some key rules to follow that will help you compound your returns.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-1-start-early\" style=\"font-size:17px\"><span class=\"ez-toc-section\" id=\"1_Start_early\"><\/span>1. Start early<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>They say the early bird gets the worm. In this case, the early bird gets to make the most of the power of compounding and earn massive profits on their investment. The earlier you invest your money, the longer it has to grow, and the higher your returns will be.<\/p>\n\n\n\n<p>So if you haven\u2019t already started investing, now is the best time.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-2-be-patient-with-your-investment\" style=\"font-size:17px\"><span class=\"ez-toc-section\" id=\"2_Be_patient_with_your_investment\"><\/span>2. Be patient with your investment<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>It\u2019s really important to give your investment a reasonable amount of time to grow if you want to see your portfolio thriving. Setting goals is important; it\u2019s just as important to define an appropriate time frame to achieve these goals. You need to be realistic because wealth creation doesn\u2019t happen overnight. It takes patience and discipline.<\/p>\n\n\n\n<p>Where does the discipline come in, you might ask. When your investments grow and you start seeing profits, it\u2019s crucial that you re-invest these profits instead of withdrawing them. Withdrawing the profits will severely lower the growth potential of your investment.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-3-choose-shorter-intervals-of-compounding\" style=\"font-size:17px\"><span class=\"ez-toc-section\" id=\"3_Choose_shorter_intervals_of_compounding\"><\/span>3. Choose shorter intervals of compounding<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The power of compounding works best when you go for shorter intervals to receive interest on your investments. You can choose among various compounding frequencies, like daily, monthly, quarterly, bi-annual, or annual.<\/p>\n\n\n\n<p>What difference does this make, though? A big one! The more often your investment compounds, the higher your returns will be.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-4-find-the-right-investment-instruments-for-you\" style=\"font-size:17px\"><span class=\"ez-toc-section\" id=\"4_Find_the_right_investment_instruments_for_you\"><\/span>4. Find the right investment instruments for you<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>You need to find the instruments with the growth potential that aligns with your goals and time limits. And the importance of diversifying your portfolio cannot be overstated. Try to invest in a variety of asset classes to make sure you aren\u2019t sacrificing liquidity.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-compound-interest-vs-simple-interest\" style=\"font-size:20px\"><span class=\"ez-toc-section\" id=\"Compound_Interest_Vs_Simple_Interest\"><\/span><a href=\"https:\/\/mudrex.com\/blog\/difference-between-simple-and-compound-interest\/\">Compound Interest Vs Simple Interest<\/a><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Let\u2019s cut to the chase with this one. Simple interest is the interest received only on the principal amount, i.e., the interest received is not added to the initial amount. We\u2019ve gone over compound interest but let\u2019s reiterate the point. In compound interest, the interest that is received on the principal amount is added to it in the next cycle, thus giving you better returns.<\/p>\n\n\n\n<p>Now, you probably have one burning question.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-which-is-better-simple-or-compound-interest\" style=\"font-size:17px\"><span class=\"ez-toc-section\" id=\"Which_is_better_simple_or_compound_interest\"><\/span>Which is better, simple or compound interest?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>This actually depends on which side you\u2019re on. If you\u2019re an investor, compound interest is the obvious winner as it adds interest on interest, earning you higher returns. On the flip side, if you\u2019re borrowing money, simple interest would work in your favor because you wouldn\u2019t have to pay interest on interest. The interest is only calculated on the principal amount.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-applying-the-power-of-compound-interest-to-crypto\" style=\"font-size:20px\"><span class=\"ez-toc-section\" id=\"Applying_the_Power_of_Compound_Interest_to_Crypto\"><\/span>Applying the Power of Compound Interest to Crypto<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>We\u2019ve seen how useful compound interest can be. But what can it do for you if you hold <a href=\"https:\/\/mudrex.com\/blog\/what-is-cryptocurrency-and-how-it-works\/\">crypto<\/a>? There are services out there that let you invest your crypto to earn compound interest on it. It works on the same principle, only instead of depositing your INR, you can deposit your cryptocurrencies. How much difference would this make to your portfolio, though? Is it really better than just holding your crypto? Let\u2019s find out.<\/p>\n\n\n\n<p>Say you have 1 <a href=\"https:\/\/mudrex.com\/coins\/bitcoin\">BTC<\/a> in your wallet as we speak. If you held on to this BTC for a year, you\u2019d have 1 BTC at the end of the year, no harm, no foul. Now, if you invested this BTC and if your investment compounded on a monthly basis at an interest rate of 6%, you\u2019d have 1.062 BTC at the end of the year. The larger your initial investment, the higher your final amount will be.<\/p>\n\n\n\n<p>So if you\u2019re looking to earn interest on your crypto investments, check out <a href=\"https:\/\/mudrex.onelink.me\/XB4d\/0x044846\" target=\"_blank\" rel=\"nofollow noopener\">Mudrex Vault<\/a>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-conclusion\" style=\"font-size:20px\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>It doesn\u2019t matter if you\u2019re holding <a href=\"https:\/\/mudrex.com\/blog\/glossary\/fiat\/\">fiat currency<\/a> or crypto. Investing to earn compound interest is a no-brainer. So if you haven\u2019t already, what are you waiting for? No better time than the present.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-faqs\" style=\"font-size:20px\"><span class=\"ez-toc-section\" id=\"FAQs\"><\/span>FAQs<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-1-is-it-better-to-compound-interest-daily-or-monthly\" style=\"font-size:17px\"><span class=\"ez-toc-section\" id=\"1_Is_it_better_to_compound_interest_daily_or_monthly\"><\/span>1. Is it better to compound interest daily or monthly?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>When it comes to compound interest, the more frequent, the better. Always opt for the option with the lowest interval of compounding. So, in this case, the obvious choice is to compound interest daily as it offers better returns.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-2-can-compound-interest-make-you-rich\" style=\"font-size:17px\"><span class=\"ez-toc-section\" id=\"2_Can_compound_interest_make_you_rich\"><\/span>2. Can compound interest make you rich?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Compound interest can certainly act as a means to create wealth. When you make an investment, it receives compound interest and grows substantially over time. You can even choose to deposit smaller amounts of money regularly, adding to your initial investment if you don\u2019t want to start off with a lump sum.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-3-what-does-compound-interest-mean\" style=\"font-size:17px\"><span class=\"ez-toc-section\" id=\"3_What_does_compound_interest_mean\"><\/span>3. What does compound interest mean?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>In compound interest, when your initial investment earns interest, this interest is added to the principal amount during the next cycle. Essentially, you earn interest on interest. This is usually preferred by investors as it offers higher returns on investments.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>TL;DR Introduction You\u2019re probably familiar with the term \u201ccompound interest\u201d from your school days. But how much thought have you given to the concept apart from remembering the formula to pass that math test? If it isn\u2019t a lot, it\u2019s probably time that changed. And we\u2019re here to help you achieve financial enlightenment and work [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":64530,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_eb_attr":"","_import_markdown_pro_load_document_selector":0,"_import_markdown_pro_submit_text_textarea":"","footnotes":""},"categories":[62],"tags":[110,111],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.9 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Power of Compounding: What is it and How Does it Work? - Mudrex Learn<\/title>\n<meta name=\"description\" content=\"In this article, you will learn about the power of compounding, how it works, and its importance in your financial life.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/10.10.23.83\/learn\/power-of-compounding\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Power of Compounding: What is it and How Does it Work? 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