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compound interest
(redirected from Compounding of interest)

    Also found in: Legal, Financial, Encyclopedia, Wikipedia 0.02 sec.
compound interest
n.
Interest computed on the accumulated unpaid interest as well as on the original principal.
compound interest
n
(Economics, Accounting & Finance / Banking & Finance) interest calculated on both the principal and its accrued interest Compare simple interest
compound interest
Interest computed on the original principal plus any accrued interest. Thus if 5% is the rate of interest per year and the principal is $1000, the compound amount after one year will be $1050, after two years it will be $1050 × 0.05 = $1102.50, after three years it will be $1102.50 × 0.05 = $1157.63, and so forth. Mathematically, if P is the original principal and I the rate of interest expressed as a decimal, the compound amount at the end of the nth year will be P(1 + I)n. The growth of the compound amount is exponential and not linear. Compare simple interest.
ThesaurusLegend:  Synonyms Related Words Antonyms
Noun1.compound interest - interest calculated on both the principal and the accrued interest
interest - a fixed charge for borrowing money; usually a percentage of the amount borrowed; "how much interest do you pay on your mortgage?"
Translations
compound interest n → interesse m composto
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In reality they are creating more debt because the compounding of interest applied by the credit card companies creates additional debt on a monthly basis.
Debt Settlement A Solution to Control Credit Card Debt by Dustin Rohde / Finance and Investment community
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Fill Your Real Estate Financing Gap with Mezzanine Financing by Nick Jevic / Real estate industry community
Compounding of interest on judgments is only a question of effective interest rates.
Effect of prejudgment interest. (Letters) by Keith, Chris / Florida Bar Journal
 
 
 
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