compound interest

noun
interest paid on both the principal and on accrued interest.

Origin:
1650–60

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Based on the Random House Dictionary, © Random House, Inc. 2014.
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Collins
World English Dictionary
compound interest
 
n
Compare simple interest interest calculated on both the principal and its accrued interest

Collins English Dictionary - Complete & Unabridged 10th Edition
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American Heritage
Science Dictionary
compound interest  
Interest computed on the original principal plus any accrued interest. Thus if 5% is the rate of interest per year and the principal is $1000, the compound amount after one year will be $1050, after two years it will be $1050 × 0.05 = $1102.50, after three years it will be $1102.50 × 0.05 = $1157.63, and so forth. Mathematically, if P is the original principal and I the rate of interest expressed as a decimal, the compound amount at the end of the nth year will be P(1 + I)n. The growth of the compound amount is exponential and not linear. Compare simple interest.
The American Heritage® Science Dictionary
Copyright © 2002. Published by Houghton Mifflin. All rights reserved.
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American Heritage
Cultural Dictionary

compound interest definition


Interest that is added not only to the principal of a loan or savings account but also to the interest already added to the loan or account; interest paid on interest.

The American Heritage® New Dictionary of Cultural Literacy, Third Edition
Copyright © 2005 by Houghton Mifflin Company.
Published by Houghton Mifflin Company. All rights reserved.
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Example sentences
The topics ranged from compound interest to number theory, hydrodynamics and
  astronomy.
Note: the cost will rise forever as compound interest works both ways.
Now for you fans of compound interest out there, that works out to be quite an
  impressive total after two decades.
Thanks to compound interest, even small sacrifices count.
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