The Power of Compounding The US stock market returned as a whole from 1926 through 1996 (annual rate of return is 10.71%) Simple interest: $1*(1+71*10.71%)=$7.6 Compound interest: $1*(1+10.71%)71=$1371.71 slide 9slide 9 The Power of Compounding The Power of Compounding The US stock market returned as a whole from 1926 through 1996 (annual rate of return is 10.71%) Simple interest: $1* ( 1+71*10.71%)=$7.6 Compound interest: $1* (1+10.71%)71=$1371.71