Compound tariffA tariff that combines both a specific and an ad valorem component.
Compound optionCompound option
Option on an option.
Compound Annual Growth RateCompound 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 compoundingDiscrete compounding
Compounding the time value of money for separate time intervals.
Compound interestCompound interest
Interest paid on previously earned interest as well as on the principal.
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.
Further SuggestionsCompound Annual Return
compound reversionary bonus
Simple compound growth method
Compound growth rate
Realized compound yield
compound annual growth rate