Compound interest is a core fundamental concept in global personal finance, investment management, and corporate asset operation, widely adopted by Western commercial banks, hedge funds, and individual retail investors. Unlike simple interest, which only generates returns based on the original principal amount, compound interest reinvests all accrued interest back into the principal, allowing earnings to generate additional returns over successive compounding periods. The compounding cycle can be customized according to financial product rules, including daily, monthly, quarterly, and annual compounding, and shorter compounding intervals consistently produce higher long-term asset returns under the same annual interest rate. In overseas mainstream financial markets, compound interest is the primary underlying logic for long-term wealth accumulation, applicable to savings accounts, fixed deposits, mutual funds, retirement pension funds, and long-term stock investment portfolios. For individual investors in European and American markets, compound interest eliminates the limitation of one-time principal return, and its long-term time value effect becomes extremely prominent in investment cycles of more than 5 years. Meanwhile, compound interest also applies to liability scenarios; high-interest consumer loans and credit card overdue fees in overseas markets often use compound interest calculation, which may lead to rapid growth of personal debt if not repaid on time. Mastering the calculation and application rules of compound interest is a basic financial literacy requirement for all overseas financial practitioners and individual investors to avoid investment risks and realize stable asset appreciation.