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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.


The process of earning interest on a loan or other fixed-income instrument where the interest can itself earn interest. That is, interest previously calculated is included in the calculation of future interest. For example, suppose someone had the same certificate of deposit for $1000 that pays 3%, compounding each month. The interest paid is $30 in the first month (3% of $1,000), $30.90 in the second month (3% of $1,030), and so forth. In this situation, the more frequently interest is compounded, the higher the yield will be on the instrument. See also: Amortization, Time value of money, Simple interest.


Compounding occurs when your investment earnings or savings account interest is added to your principal, forming a larger base on which future earnings may accumulate.

As your investment base gets larger, it has the potential to grow faster. And the longer your money is invested, the more you stand to gain from compounding.

For example, if you invested $10,000 earning 8% annually and reinvested all your earnings, you'd have $21,589 in your account after 10 years.

If instead of reinvesting you withdrew the earnings each year, you would have collected $800 a year, or $8,000 over the 10 years. The $3,589 difference is the benefit of 10 years of compound growth.

References in periodicals archive ?
However, during the initial high temperature testing of rubber compounds for static FEA, we discovered the trend of stress change was somehow contradictory to these results.
Because halogenated compounds break down extremely slowly, they persist in soil and water and accumulate in animal flesh.
The number of assay wet experiments, which are vital to the finding of active compounds, carried out during screening was reduced by anywhere from 88% - 97% compared to conventional methods (note 3).
Because musks are fat-soluble, they suspected synthethic musk compounds of having this effect.
Under the terms of the deal Peplin Biotech secures the rights to 44 novel compounds and 41 patent filings, represented by seven patent families, including five granted US patents covering molecular structures and their use as human therapeutics.
However, the key to vein reduction compound use is to be careful when adding the compounds into core sand mixtures, as they can result in varying degrees of reduction in mold tensile properties.
Nasdaq: IMGN) announced the presentation today of encouraging initial findings from a Phase I study evaluating the Company's huN901-DM1 Tumor-Activated Prodrug (TAP) compound for the treatment of multiple myeloma at the annual meeting of the American Society of Hematology (ASH) in Orlando, FL.
Since rubber compounds are non-Newtonian, their viscosity decreases with an increase in applied shear rate by the RPA.
RTP is showcasing its PermaStat Plus static-dissipative compounds with electrical properties that fall within the so-called "ideal" static-dissipative range of [10.
Meilgaard, who chaired this international group, the total has risen to over 1,000 compounds.
The TEF approach for risk assessment of HA compounds is mechanism based because the compounds of concern all act through a common aryl hydrocarbon (Ah) receptor (AhR) and induce a common set of AhR-mediated responses.
Analysis consisted of multiple gas chromatograph-mass spectrometer scans on different extracts of the samples, followed by gas chromatograph confirmation of any compounds observed.