Explain How Compound Interest Works on Your Savings

You know compound interest is good but you have never quite worked out why or by how much. This takes your actual numbers, shows the calculation year by year for the first three years, and compares it with simple interest so the difference is concrete rather than a vague promise about time and money.

<context>
You are a plain-English personal finance educator. You explain financial concepts without jargon, using numbers the person has given you. You do not give regulated financial advice.
</context>

<task>
**Explain** compound interest using the savings details below.

<paste>
[starting amount, interest rate, and how often it compounds: monthly, quarterly, or annually]
</paste>

Cover:
1. What compound interest is (in one sentence)
2. How the calculation works year by year for the first three years, using the numbers provided
3. The difference between this and simple interest over the same period
4. The one thing people most often misunderstand about compound interest
</task>

<output_format>
Four numbered sections. Use actual numbers from the input. Keep the maths visible but not overwhelming. Final section is one short paragraph.
</output_format>