Compound tariff 


Home Site Map Add Term Search About Us Contributors 
Compound tariffA tariff that combines both a specific and an ad valorem component.Similar MatchesCompound optionCompound optionOption on an option. Compound Annual Growth RateCompound Annual Growth RateBest 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 compoundingCompounding the time value of money for separate time intervals. Compound interestCompound interestInterest paid on previously earned interest as well as on the principal. CompoundingCompoundingThe 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 Returncompound reversionary bonus Compounding frequency Simple compound growth method Compound growth rate compound interest Continuous compounding Realized compound yield Compounding period compound annual growth rate Compound interest 
