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Compound interest |
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Compound interestInterest paid on previously earned interest as well as on the principal.Compound interestThe interest paid on the principal balance in a mortgage and on the accrued and unpaid interest of the loan.Compound interestThe process by which interest earned on an investment is added back to the amount invested, so increasing the amount of 'principal' on which further interest will be earned in future years.Compounding is sometimes described as the miracle of investing. The fact is that if you reinvest income in your portfolio, you will end up with a much larger amount than if you spend the income as you go along because of the effect of compounding. But to allow compounding to work its magic, you have to start young.Albert Einstein, when asked what he considered to be mankind's greatest invention, replied 'Compound interest!'Similar MatchesCompound optionCompound optionOption on an option. Discrete compoundingDiscrete compoundingCompounding the time value of money for separate time intervals. Compound growth rateCompound growth rateSee: Compound Annual Growth Rate Compound Annual ReturnCompound Annual ReturnSee: Compound Annual Growth Rate Simple compound growth methodSimple compound growth methodCalculating a growth rate by relating terminal value to initial value and assuming a constant percentage annual rate of growth between the two values. Further SuggestionsCompound tariffcompound annual growth rate Compounding frequency Realized compound yield compound reversionary bonus Continuous compounding Compounding Compound Annual Growth Rate Compounding period |
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