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Interest on interest |
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Interest on interestInterest earned on reinvestment of each interest payment on money invested. See: compound interest.Interest on interest Similar MatchesAnd interestAnd interestAn indication that the buyer will receive accrued interest in addition to the price quoted for a bond. InterestInterestThe charge you pay if you borrow money, and the income you receive if you lend it or invest it in an income-producing bank account or in a security like a bond or a gilt. For example if you borrow £1,000 at an interest rate of 10% per year, the interest payable is £100 per year. Loans are sometimes made at fixed rates of interest, and sometimes at variable rates.If you invest £1,000 at 10%, then you as lender expect to receive £100 interest. If instead of spending the interest, you reinvest it in the same security, then at the start of the second year you will have £1,100 invested and attracting 10%, so at the end of the second year you expect to receive £110 interest. This is the principle of compound interest, where you get rolling interest on your original capital and on the reinvested income. Open interestOpen interestThe net amount of outstanding open positions, either long or short, in a given futures or options contract. Simple interestSimple interestInterest calculated as a simple percentage of the original principal amount. Compare to compound interest. Risk Free Interest RateRisk Free Interest RateDescribes return available to an investor in a security somehow guaranteed to produce that return. The risk-free interest rate compensates the investor for the temporary sacrifice of consumption. Further SuggestionsWild InterestInterest Interest rate ceiling Deferred interest mortgage Earnings before interest, taxes, and depreciation (EBITD) Covered interest parity Compound interest Earnings before interest, taxes, depreciation, and amortization (EBITDA) Forward interest rate Effective annual interest rate Interest parity True interest cost simple interest interest in possession variable interest rate Minority interest prevailing interest rate Capitalized interest Exact interest Covered Interest Rate Parity Interest only mortgages Short interest theory Interest rate Interest rate futures contract Amortizing interest rate swap |
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