Compound Interest
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The more often interest is added, the sooner it starts earning its own interest, so daily or monthly compounding produces a higher final balance than annual compounding at the same stated rate, though the difference shrinks at lower rates and shorter terms.

The stated rate is the nominal annual rate before compounding is applied. The effective annual yield reflects what you actually earn once intra-year compounding is factored in, so it is always slightly higher when compounding more than once a year.

Each new contribution starts compounding immediately and keeps growing for the rest of the term, so contributions made early accumulate far more growth than those made later — this is why starting sooner matters more than contributing larger amounts later.

No, the result is a nominal future value. To estimate purchasing power, you would separately discount the result by expected inflation, since a larger future balance can still buy less if prices rise faster than your money grows.

This is the nature of exponential growth: early on, the interest earned is small relative to the principal, but as the balance builds, the same rate produces larger dollar amounts, creating the classic upward-curving compound growth chart.