compound
adjective
FINANCE uk/ˈkɒmpaʊnd/ usused to describe a system of calculating interest in which it is paid on both the amount of money invested or borrowed and on the interest that has been added to it:
The investment has grown $1,000 into $3,552 over five years, a compound annual return of 28.6%.
compound
verb [ T ]
FINANCE uk/kəmˈpaʊnd/ usto calculate interest on both the amount of money invested or borrowed and on the interest that has been added to it:
Interest will be compounded every six months.
See also
compound interest
Compare
simple interest