In this deck, you'll learn about compound growth and decay. This is a powerful idea that describes how money in a savings account can grow, or how the value of something like a car can decrease over time. We'll start by comparing simple interest with compound interest, and then look at the formula that makes these calculations straightforward.

First, let's quickly review simple interest. With simple interest, the amount of interest earned is the same every year, because it's always calculated on the original amount you started with, also known as the principal.

Compound interest is different. After the first period, the interest you've earned is added to your original amount. Then, for the next period, you earn interest on this new, larger total. This is often called earning 'interest on interest'.