First, let's talk about simple interest...

Let's say we have 10% interest in a bank and stored $100. then the next year we will have $100 + 10% of $100, which is $10. So the first year we get $110, then the year after we will have $110 + $10 = $120, and so on, so for every next year, we will have plus 10% of 100 to that number...

Now, let's talk about compound interest...

One important thing to remember...