What is the main idea of the passage?

Compound interest makes savings grow on earlier gains, rewarding time (The passage explains that interest is earned on both original savings and prior interest, and that time is the key advantage.)

Why might an early saver beat a later saver who saves more?

More time lets gains keep building on gains (The text says beginning early gives 'the process more time to fold gains upon gains.')

In the passage, 'steeply' most nearly means

sharply and quickly upward (The pile 'climbs steeply' after a slow start, meaning a sharp, fast rise.)

The Quiet Power of Compounding: Level 2 Reading Comprehension Questions

Q: According to the passage, what do you earn money on in the second year?

Both your original savings and the first year's interest (The passage says that in the second year "you earn money not only on your original savings but also on the interest from the first year." Each round builds on the last.)

Imagine planting a single coin that grows a little each year, and that the growth itself starts to grow. This is the heart of compound interest. In the first year, you earn a small amount on what you saved. In the second year, you earn money not only on your original savings but also on the interest from the first year. Each round builds on the last.

The surprise is how slow it feels at the start and how fast it becomes later. For a long time the pile barely seems to move. Then, almost without warning, it climbs steeply. People who begin saving early often end up far ahead of those who save more but begin late, because they give the process more time to fold gains upon gains.

Comprehension questions