Compound Interest


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Related to Compound Interest: simple interest

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.

References in periodicals archive ?
"Compound interest is a smart way for expats to put money away before reaping the rewards later in life," said Hamzah.
One of the oldest tricks in the book; compound interest.
Therefore, it is clear to see the benefits of saving earlier but for less time using the power of compound interest," said Shalchi.
On the other hand, Investopedia defines compound interest as interest calculated on the initial principal and also on the accumulated interest of previous periods of a deposit or loanThe rate at which compound interest accrues depends on the frequency of compounding; the higher the number of compounding periods, the greater the compound interest.
There is also a significant gender gap in Americans' understanding of compound interest. According to the survey, 62% of U.S.
adults have a relatively weak understanding of compound interest, the survey found.
COMPOUND INTEREST--So where does the concept of compound interest come in to play?
He told MPs in writing that compound interest on loans taken out by the government had stood at BD90.6m in 2010, only to increase by 40 per cent as the government borrowed more.
But under the lease compound interest of 10% has been applied to the original PS90 every year, leaving them paying more than PS3,000 by 2012.
COMPOUND INTEREST: The Curious Chemistry Of Food And Drink by Andy Brunning will open up a whole new chemical world behind the weird sensations we experience through food and drink - drunkenness, brain freeze, spicy chillies and many more.
The first concept addressed by the program is compound interest. People tend to underestimate how compound interest grows, a phenomenon referred to as future value bias.
The opening batsman- turnedcommentator likened the Delhi lad to a Fixed Deposit Receipt FDR) that he felt the country could encash with compound interest. " I see in Kohli a future India captain.