Compound Interest is the interest you earn on both your original money and on the interest you keep accumulating.
Where: P = Principal, r = Annual rate, n = Compounding frequency per year, t = Years.
You lend out ₹10,000 at an 8% annual interest rate that compounds yearly for 10 years. In the first year, you earn ₹800. In the second year, you earn interest on ₹10,800, and so on. After 10 years, your total amount becomes ₹21,589.