compound interest


Definition of compound interest

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

Examples of compound interest in a Sentence

Recent Examples on the Web As Albert Einstein once reportedly said, compound interest is the eighth wonder of the world. Nathan Bachrach And Amy Wagner, The Enquirer, "Allworth Advice: Start saving now and don't ever stop, young investors," 31 July 2020 Do your part to make sure the young people in your life understand budgeting, banking, apartment leases, compound interest, credit cards, investing, loans, contracts and the importance of record-keeping. Teresa Dixon Murray, cleveland, "How to look out for your rights as a consumer: Money Matters," 5 Apr. 2020 For many young adult workers, the choice between saving for retirement or becoming debt-free is a no-brainer, due to the burden of compounding interest. Scott Thompson, Fortune, "Tax-exempt student loan assistance is now law. It’s time to make it permanent," 3 Apr. 2020 The book takes readers on a visual quest, beginning with the most basic concepts of compound interest, budgeting and emergency funds, to more complicated ones like taxes, credit, investing, retirement planning and understanding cryptocurrencies. NBC News, "A napkin helped this money expert visualize her way to financial success," 15 Jan. 2020 Again, the three variables behind compound interest become essential. Steve Booren, The Denver Post, "Improving Investor Behavior: The sharp knife of compound interest," 27 Oct. 2019 Those in debt need to know that compound interest builds as the amount of money owed on a loan accumulates on the unpaid principal and previous interest charges. Valerie Sweeten, Houston Chronicle, "Credit card debt can slow down retirement plans," 24 Feb. 2020 Homeowners in this relatively small community of about 450 homes on 154 acres are being fleeced by compounding interest, bad debt and transfer fees. The Denver Post Editorial Board, The Denver Post, "Editorial: Rein in the unlimited taxing powers of developers," 11 Dec. 2019 This helps demonstrate the power of compound interest and the long-term benefits of making a habit of saving money. NBC News, "Teen debit cards: A real-world way to teach your kids about money," 24 Oct. 2019

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'compound interest.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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First Known Use of compound interest

1660, in the meaning defined above

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Time Traveler for compound interest

Time Traveler

The first known use of compound interest was in 1660

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Statistics for compound interest

Last Updated

7 Aug 2020

Cite this Entry

“Compound interest.” Dictionary, Merriam-Webster, Accessed 21 Sep. 2020.

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More Definitions for compound interest

compound interest


English Language Learners Definition of compound interest

finance : interest paid both on the original amount of money and on the interest it has already earned

compound interest

Legal Definition of compound interest

see interest sense 5

Comments on compound interest

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