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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 ?
Now the answer to the question, "Are rubber compounds softer at elevated temperatures?
Industry will probably be pleased to hear that it isn't responsible for the cleanup of additional compounds, he says, but the study "doesn't say that Monsanto, the main producer of PCBs, is not responsible for PCBs that are found in the environment.
Acquiring labels for compounds require expensive wet experiments in the case of drug screening, thus a lesser number of wet experiments is desirable.
Immediately after incubation, Epel and Luckenbach found rhodamine B uptake to be 38-84% higher in tissue treated with musk compounds than in controls.
The EPUFA compounds licensed by Peplin are novel patented synthetic molecules.
The same comparison was made with compounds containing higher carbon black loadings of N650 at 55 parts by volume.
Provides toll-compounding services and proprietary engineered compounds with an emphasis on nylon, PP, polyester, PC, and silicone concentrates.
The fruit of the hop plant contains non-bitter compounds called alpha acids.
The compounds used in this study were purchased from Sigma-Aldrich (Milwaukee, WI) and include chrysin (purity > 97%), phloretin (> 95%), kaempferol (> 95%), galangin (95%), naringenin (95%), genistein (98%), quercetin (99%), myricetin (95%), cantharidin (98%), luteolin (> 90%), baicalein (98%), daidzein (> 95%), emodin (> 90%), apigenin (> 90%), and diosmin (95%).
Since very few semi-volatile compounds were found in the laboratory leach tests and none were found in the initial groundwater samples, only volatile analyses were performed on the groundwater samples from the foundry landfills in the resampling.