Leave $1,000 alone at 7% a year.

Each square is $10.

Year 1: it earns $70.

Year 2: $70 again, plus 7% of that $70.

That $4.90 is interest on interest: compounding.

Every year, every square earns 7%. Even the gold ones.

Year 10: $1,967. It has almost doubled.

Rule of 72: 72 ÷ 7 is about 10 years to double.

Year 20: $3,870. Year 30: $7,612.

Interest on interest is now the biggest part.

Without it, simple interest stops at $3,100.

The last 10 years add $3,743, more than the first 20.

Start 10 years later, and you end with about half.

Interest on interest needs one thing: time.