Explain how compound interest works with an example.

Compound interest means earning interest not just on the original amount but on the amount including interest earned in previous years. For example, if you deposit ₹1,000 in your account with 6% interest each year, at the end of the first year, you will have ₹1,060. In the second year, you earn interest on ₹1,060 (not just ₹1,000), which gives you ₹63.60 as interest. This process is called compounding and helps money grow exponentially over time.