Compound Interest

Business / Taxes / Compound Interest: When the interest you earn on an investment is added to form the new base on which future interest accumulates, it is compound interest. For example, say you earn 5% compound interest on $100 every year for five years. You'll have $105 after one year, $110.25 after two years, $115.76 after three years, and $127.63 after five years. Without compounding, you earn simple interest, and your investment doesn't grow as quickly. For example, if you earned 5% simple interest on $100 for five years, you would have $125. A larger base or a higher rate provide even more pronounced differences. Compound interest earnings are reported as annual percentage yield (APY), though the compounding can occur annually, monthly, or daily.

Other Words for Compound

Compound Noun Synonyms: put together, combine, mix, concoct, compose, make (up), formulate, blend
Compound Verb Synonyms: blend, merge, coalesce, combine, unite, fuse or also fuze, come or go together
Compound Adjective Synonyms: composite, blend, synthesis, combination, consolidation, parasynthesis, parathesis, mixture, amalgam, alloy, merging, merger, mix
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Other Words for Interest

Interest Adjective Synonyms: concern, significance, importance, weight, moment, note, consequence
Interest Noun Synonyms: attention, attentiveness, concern, regard, curiosity, scrutiny, notice, engagement
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Interest Payments

Business / Finance / Interest Payments: Interest earned on reinvestment of each interest payment on money invested. See: compound interest. MORE

Periodic Interest Rate

Business / Taxes / Periodic Interest Rate: The periodic interest rate, sometimes called the nominal rate, is the interest rate a lender charges on the amount you borrow. Lenders are also required to tell you what a loan will actually cost per MORE

Simple Interest

Business / Accounting / Simple Interest: Interest applied to the original sum invested (as opposed to compound interest ). Eg. 1000 invested over two years at 10% per year simple interest will yield a gross total of 1200 at the end of the pe MORE

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