Home on The Ledger

How Compound Interest Actually Works

Tue, 20 Oct 2026 00:00:00 +0000

Compounding gets described so often as “interest on interest” that the phrase stops meaning anything. So let’s take it apart.

The mechanism

Put £10,000 into an account paying 7% a year. After one year you have £10,700. The second year, the 7% applies to £10,700 — not £10,000. You earn £749, not £700.

About

Thu, 01 Oct 2026 00:00:00 +0000

The Ledger is an independent publication about personal finance. We write for people who want to understand their money without being sold something.

What we cover

Four areas, because they’re the ones that actually move the needle:

Contact

Thu, 01 Oct 2026 00:00:00 +0000

We read everything, and we reply to most of it.

Corrections

If something on this site is wrong or out of date, that’s the most useful email you can send us. Include the page URL and, if you have it, the source that contradicts us. Corrections get priority over everything else.

Disclaimer

Thu, 01 Oct 2026 00:00:00 +0000

Not financial advice

The content on this site is general information. It is not personalised financial, investment, tax or legal advice, and it does not take your individual circumstances into account.

Privacy Policy

Thu, 01 Oct 2026 00:00:00 +0000

Last updated: 22 October 2026

The short version

This site has no cookies, no analytics scripts, no advertising pixels and no tracking of any kind. It’s a set of static HTML files served from a content delivery network.