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# compound interest

noun
1.
interest paid on both the principal and on accrued interest.
Origin of compound interest
1650-1660
1650-60
Dictionary.com Unabridged
Based on the Random House Dictionary, © Random House, Inc. 2016.
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British Dictionary definitions for compound-interest

## compound interest

noun
1.
interest calculated on both the principal and its accrued interest Compare simple interest
Collins English Dictionary - Complete & Unabridged 2012 Digital Edition
© William Collins Sons & Co. Ltd. 1979, 1986 © HarperCollins
Publishers 1998, 2000, 2003, 2005, 2006, 2007, 2009, 2012
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compound-interest in Science
 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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compound-interest in Culture

### 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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### Difficulty index for compound interest

Few English speakers likely know this word

### Word Value for compound

15
20
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