Compound: Difference between revisions
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To compound means to calculate interest, return or growth on an accumulating total, including earlier amounts of interest, return or growth. | To compound means: | ||
* to calculate interest, return or growth on an accumulating total, | |||
* including earlier amounts of interest, return or growth. | |||
Revision as of 07:50, 3 December 2019
To compound means:
- to calculate interest, return or growth on an accumulating total,
- including earlier amounts of interest, return or growth.
Compound interest is calculated as ‘interest on interest’ as well as interest on the original principal amount.
Compound rates of return or growth are similarly calculated based on the rolling up accumulated total amount, rather than just the initial amount.
