compound interest

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  • noun

Words related to compound interest

interest calculated on both the principal and the accrued interest

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Noting the extended delay between the time of the taking and the time of payment, the court held that the compounding of interest is necessary to put Central in as good a position as it would have been had the payment coincided with the appropriation.
With time, small amounts saved regularly grow significantly because of the compounding of interest.
For example, the extra taxes from rising tax rates may be offset by a larger amount of accumulated funds in an IRA due to tax-deferred compounding of interest at a higher rate of return.
Net interest expense increased to $12,396,000 from $11,618,000 primarily due to an increase in the effective interest rate on the bank loan as well as the compounding of interest on the Zero Coupon Convertible Subordinated Notes.
The following observations are made: 1) its rule always overcompensates prevailing parties by allowing compounded interest; 2) the compounding of interest goes beyond compensating the judgment creditor for the lost use of its money, of placing it in the same position it would have been had the loss/ damages not have occurred, placing it in a better situation, allowing for retribution not restitution; and 3) permitting compounded interest results in an unfair windfall to the creditor, the larger the judgment and the longer the passage of time until collected, the larger the windfall.
Selecting the particular frequency of discounting may involve developing an equivalent frequency pattern, which blends actual market occurrences, such as frequency of receipts, disbursements, and compounding of interest, with physical capabilities and capacities (income capitalization and cash flow models).