Compound Interest

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Compound Interest

Interest generated by the sum of the principal and any accrued interest.

Interest is normally compounded on a daily, quarterly, or yearly basis. The more often interest is compounded, the larger the principal will grow and the greater the interest the new principal will produce.

compound interest

n. payment of interest upon principal and previously accumulated interest which increases the amount paid for money use above just simple interest. Thus, it can increase more rapidly if compounded daily, monthly or quarterly. The genius physicist Albert Einstein called compound interest man's "greatest invention." Most lenders agree. (See: interest, promissory note)

COMPOUND INTEREST. Interest allowed upon interest; for example, when a sum of money due for interest, is added to the principal, and then bears interest. This is not, in general, allowed. See Interest for money.

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Even with moderately higher tax rates at retirement, IRA tax-free compounding of interest provides a higher rate of return and better protection from inflation by accumulating funds at a faster rate for retirement.
general rule in admiralty that prejudgment interest be awarded to serve purpose of restitution and full compensation, with the compounding of interest annually promoting "the spirit and intent of this general rule.
The genesis of the problem of selecting the frequency of discounting is not with the timing of the rent payment but with selecting the frequency of compounding of interest.
Interest and other, net decreased from income of $1,574,000 to expense of $528,000 due to a decrease in interest income resulting from a decrease in funds available for short term investments and an increase in interest expense due to the compounding of interest on the Senior Deferred Coupon Notes.