Interest
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This video offers more details on how to apply interest rates. Remember to apply the interest rate to the initial amount only when calculating the future value of an amount using a simple interest rate. Apply the interest rate to the initial amount in addition to the amount of interest earned when calculating the future value of an amount using the compound interest rate. Compounding means you earn interest on the interest you earn. Compounding allows your savings to grow much more quickly over time.
Source: Khan Academy, https://youtu.be/jtqOqa_C-ZU?si=kna_WG-jCotM2T-V
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