How do indexes improve query performance?

Short answer: Indexes improve query performance in several ways:

Real-world example (ShopNest)

ShopNest adds an index on Orders(CustomerId, CreatedAt) because “my recent orders” is queried constantly.

Say this in the interview

1. Define — one clear sentence (the short answer above).
2. Example — relate it to a project like ShopNest or your real work.
3. Trade-off — when you would not use it.