The document discusses compound interest versus simple interest. Compound interest earns interest on both the principal amount and any interest that has already been earned, making it grow faster than simple interest which only earns interest on the principal amount. An example shows $100 growing to $161 after 5 years with compound interest, versus $150 with simple interest. The compound interest formula is provided, and examples are worked out calculating amounts for various principal amounts, interest rates, and time periods using compound interest.