This year you received 10.5% interest on the $100 you invested in the first place, plus 10.5%
interest on your $10.50 of first year interest, which came out to $1.10. In addition, you received
10.5% interest on your $11.60 of second year interest, which came out to $1.22. It all added up
to $12.82 in interest. So, now you're getting a lot of interest on interest. You're getting it for year
1's interest and for year 2's interest.
Year 4:
As you can see, all you did was invest $100 one time, yet every year your interest payment keeps
getting bigger, because you keep getting more and more interest on interest.
Year 5: