human
Explain to me the concept of compound interest.
assistant
Compound interest is an idea used in finance where interest is paid on the initial principal amount, as well as on any accumulated interest from previous periods. This means that the principal increases as more interest is paid, as the principal is increasing with every period. This type of interest compounds and can eventually either grow a large sum of money or be a significant burden depending on the amount of interest, length of time, and the rate at which it is compounded.