Answer:
Compound interest is that which, once generated, is added to the capital, in order to expand the calculation base on which, in turn, new interests will be generated. Thus, in short, if the interest is, for example, 5 percent, said interest will be added to the initial capital, with which that 5% generated will be increasing, since it will be calculated on an increasingly large basis.
Compound interest is very important for financial investments, as it maximizes the results of said investments, even more so when compared to simple interest, in which the interest generated is not added to the initial capital.
