compound interest
When the money you earn from savings or investments starts earning its own money on top of itself over time. The longer you leave it alone the faster it tends to grow.
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Words beside it
- Accrued interest
Interest a bond has earned since its last payment; a buyer pays it to the seller on top of the price.
- Compound annual growth rate (CAGR)
The steady yearly rate that would turn a starting value into an ending value over a period.
- interest
Interest is money paid to you for letting someone else use your money, or money you owe when you borrow from someone else. When you buy a bond you are the lender so the borrower pays you interest on a regular schedule.
- Interest rate risk
The chance a bond's price falls because rates rose.
- Open interest
The number of option contracts outstanding for a given strike and expiration.
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