The Law of Equivalent Exchange is one of the most basic concepts of Alchemy, and is central to many of the occurrences that appear in the Fullmetal Alchemist series. Although a very large misconception of Alchemy is that it can do anything, it is often overlooked that Alchemy, like all other sciences, has its own laws that it has to abide by.
The Law of Equivalent Exchange explicitly states: "In order to obtain or create something, something of equal value must be lost or destroyed." This means that when an Alchemist creates something, such as a weapon, he must, in a sense, "pay" for this weapon by giving up something of equal value. In the Fullmetal Alchemist series, it is also seen that many people also abide by this rule in their everyday life, such as at the end of the Brotherhood series, when Ed proposes to Winry.
A rebound is what happens when someone attempts creating something of a large value with something that is too small. When this happens, the whole alchemic equation is thrown way out of balance, and it causes one of the sides to go out of control, just so it can balance the equation. In worst case scenarios, this can lead to critical injury or death.
Severe cases of rebound is seen in Human Transmutation, because as stated in the Anime, nothing is as valuable as a Human life. This is why whenever someone attempts human transmutation, they end up losing much more than they started with, such as limbs or their whole body, like Alphonse Elric. Since Human Transmutation does not work, however, they end up giving up these things so they can see the Truth and go through the Gate.
 Similarities in Real Life
 Law of Conservation of Mass
The Law of Conservation of Mass states that energy of matter cannot be created from nothing, nor completely destroyed. This means that an object would have to have the same mass when it is whole as it does when it is destroyed, regardless of what happens to it. The matter that was once in the object can never be completely destroyed.
 Law of Natural Providence
The Law of Natural Providence states that an object of material that is made up of a certain element or material can only be changed into another object if the other object has the same basic makeup as the other. For example, if there is an object that is mostly made up of water and has attributes of water, it can only be changed into another object that also has the same makeup of water.