Compound interest is often described as 'interest on interest'. Unlike simple interest, which is calculated only on the principal amount, compound interest is calculated on the principal and also on the accumulated interest of previous periods.
The power of compounding is most evident over long periods. For example, investing a small amount monthly through a SIP (Systematic Investment Plan) can grow exponentially over 20 or 30 years.
To maximize your wealth, focus on three factors: the amount you invest, the rate of return, and most importantly, the time you stay invested.