Compound tariff

 

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Compound tariff

A tariff that combines both a specific and an ad valorem component.



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Simple compound growth method

Simple compound growth method

Calculating a growth rate by relating terminal value to initial value and assuming a constant percentage annual rate of growth between the two values.


Compounding frequency

Compounding frequency

The number of compounding periods in a year. For example, quarterly compounding has a compounding frequency of 4.


Compound Annual Growth Rate

Compound Annual Growth Rate

Best defined by example. If you invest $100 today and make 5% in the first year and reinvest ($105) and make 8% in the second year, the compound annual growth rate is 6.489%. The calculation is $100x1.05x1.08=$113.4 which is what you end up with at the end of year two. The average return is [square root(113.4/100) -1]= 0.06489 or 6.489%. Note 1. If we had three compounding periods we would take the cubic root (power of 1/3). Note 2. If we had invested at exactly 6.489 in both periods, we get $100x1.06489x1.06489=$113.4. Note 3. The example is directed to a return - but CAGR could be applied to earnings growth, GDP growth, etc.


Compound growth rate

Compound growth rate

See: Compound Annual Growth Rate


Compound interest

Compound interest

The interest paid on the principal balance in a mortgage and on the accrued and unpaid interest of the loan.


Further Suggestions

compound interest
Compounding period
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compound reversionary bonus
Discrete compounding
Realized compound yield
Continuous compounding
compound annual growth rate
Compound interest
Compounding
Compound Annual Return


 
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