Explain How Compound Interest Works

You know compound interest is important. You have been told this many times. You have not quite grasped why the numbers are as dramatic as people claim, or what the difference is between starting now and starting in five years. This shows you, in plain English, with actual numbers.

Explain how compound interest works to someone who paid attention in school but has forgotten the details. Start with a concrete example: someone puts aside a fixed amount and leaves it alone for twenty years. Show what happens at 3%, 6%, and 9% annual return using simple numbers, not a formula. Then explain why starting ten years earlier makes such a large difference. Keep the whole explanation under 200 words and use real-world contexts (ISA, pension, savings account) not abstract examples.