 # Compound tariff Home  Site Map  Add Term  Search  About Us  Contributors # Compound tariff

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

# Compound interest

Compound interest

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

# Compounding

Compounding

The process of accumulating the time value of money forward in time. For example, interest earned in one period earns additional interest during each subsequent time period.

# 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.

# Discrete compounding

Discrete compounding

Compounding the time value of money for separate time intervals.

# Compound option

Compound option

Option on an option.

# Further Suggestions

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