compound interest

noun

: interest computed on the sum of an original principal and accrued interest

Examples of compound interest in a Sentence

Recent Examples on the Web
Examples are automatically compiled from online sources to show current usage. Read More Opinions expressed in the examples do not represent those of Merriam-Webster or its editors. Send us feedback.
That’s thanks to a concept in finance known as compound interest. Elisabeth Buchwald, CNN Money, 8 Dec. 2025 But a personal investment account, with a boost from billionaires, is an opportunity for parents to teach their kids about compound interest, savings and a tangible way to create future wealth. Nicole Russell, USA Today, 4 Dec. 2025 At the same time, delinquencies have steadily increased, due in large part to average credit card APRs remaining above 22%, which can cause unpaid balances to balloon quickly due to compound interest charges. Angelica Leicht, CBS News, 17 Nov. 2025 Bottom line Understanding and harnessing the power of compound interest is the key to financial freedom. Zev Fima, CNBC, 5 Nov. 2025 See All Example Sentences for compound interest

Word History

First Known Use

1660, in the meaning defined above

Time Traveler
The first known use of compound interest was in 1660

Cite this Entry

“Compound interest.” Merriam-Webster.com Dictionary, Merriam-Webster, https://www.merriam-webster.com/dictionary/compound%20interest. Accessed 15 Dec. 2025.

Kids Definition

compound interest

noun
: interest paid or to be paid both on the principal and on accumulated unpaid interest

Legal Definition

compound interest

see interest sense 5

Last Updated: - Updated example sentences
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