Compound Interest Rate(redirected from Compound Interest Rates)
Compound Interest Rate
The interest rate on a loan or other fixed-income instrument in which interest previously paid is included in the calculation of future interest. For example, if one has a certificate of deposit for $1,000 with a 3% compound interest rate (compounded monthly), the interest paid is $30 (3% of $1,000) in the first month, $30.90 (3% of $1,030) in the second month, and so forth. The more frequently interest is compounded, the higher the yield will be on the instrument.