LeoGlossary: Compound Interest
*Compound Interest is often thought of as "interest on one's interest".
When investing, not only does the original amount earn interest but so does the interest accrued. This is known as compounding. Over time, as the total interest builds, so does the addition amounts earned on it.
This can lead to exponential games over long periods of time. The two factors are time and rate of return.
Posted Using LeoFinance Beta