Compound Growth

Compound interest—what Babylonians called "interest on interest" in Akkadian—appears on clay tablets from ancient Babylon dating to 2000–1700 BCE, including mathematical problems asking how long a loan would take to double in value. Babylonians modeled exponential growth at typical rates of 20% for silver loans and 33⅓% for agricultural debts, recognizing that debts grew exponentially while the rest of the economy grew more slowly. However, formal mathematical analysis didn't emerge until medieval times, beginning with Fibonacci in 1202 CE, who developed techniques for analyzing compound interest systematically.