Chapter 3.4 Explore Compound Interest – In this chapter we begin our exploration into the magic formula for making the rich, rich. It is not much of a secret, it’s just math. Compound interest is when your money earns money on the principal and the interest over and over again. In this chapter we define the number of times that we compound, annually, semiannually, quarterly and daily. We use the simple interest formula of I=prt and adjust the principal each time we compound and adjust the time for how often we are compounding.