What is compound rate?
By definition Compound interest is interest added to the principal of a deposit or loan so that the added interest also earns interest from then on. This addition of interest to the principal is called compounding. Compared to simple Interest where only the principal earns interest, the compound interest gives more benefit for Lenders.
To see how much more you can earn using this method, let’s use an example:
Condition: $ 1.000 deposit with 10% interest rate monthly. Let's calculate Interest you can earn for each month.
With reinvesting your monthly interest, you let your interest to generate its own interest earning you a higher interest in the whole year.