In this video, we dive into understanding compound interest and its practical applications using a financial calculator. Starting with simple scenarios, we explore how money grows over time with compound interest versus simple interest. The video provides a clear example of how a $100 investment grows over time with different interest rates and compounding periods. Key concepts such as periodic interest rates, the formula for effective annual rate, and setting up your calculator for financial calculations are also covered. This video is perfect for finance students looking to grasp the fundamentals of compound interest and how to apply them to real-world problems.