To demonstrate how compounding operates, let's consider an example: You have $10,000 in an account earning 5% interest annually. After the first year, the account grows to $10,500, with $500 in interest added to the initial $10,000. In the second year, the account earns 5% interest on both the principal and the $500 interest from the first year, resulting in a gain of $525 and a balance of $11,025. Over 10 years, assuming no withdrawals and a consistent 5% interest rate, the account would reach $16,288.95. In essence, compounding is a fundamental driver of wealth accumulation and is crucial in many long-term investment strategies. Opting to leave your money idle in a low-interest bank account would significantly slow down the wealth-building process. Instead, leveraging compound interest by investing regularly can accelerate the growth of your wealth over time. Start with an amount you're comfortable with, and watch as your wealth grows exponentially.