Compound Interest
Compound interest is interest calculated on principal and accumulated interest, with the outcome shaped by rate, frequency, time, cash flows, and terms.
Future-value and compounding concepts for accumulating balances, comparing rate conventions, and modeling cash flows at a target date.
Future Value and Compounding explains how principal, accumulated interest, cash-flow timing, and rate conventions determine a balance at a future date. Use this branch to distinguish the amount being calculated from the mechanism and frequency used to calculate it.
These pages sit inside Time Value, Present Value, and Compounding. Move to the broader section when the question is primarily about discounting future cash flows back to today.
| Concept | Use it for |
|---|---|
| Future Value | Accumulates one or more cash flows to a specified future date under stated rates and timing. |
| Compound Interest | Explains when prior interest enters the balance used to calculate later interest. |
| Compounding Frequency | Distinguishes annual, periodic, daily, and continuous conventions and their effect on effective rates. |
“Compound amount of one” is another name for a future value factor, not a separate canonical concept here. “Interest compounding” is covered by Compound Interest.
This section is educational and does not provide individualized investment, deposit, borrowing, retirement, tax, accounting, or legal advice.
Choose a subsection first. Deeper term pages live inside each subsection, which keeps large topic hubs readable.
Compound interest is interest calculated on principal and accumulated interest, with the outcome shaped by rate, frequency, time, cash flows, and terms.
Compounding frequency is how often accumulated interest enters the balance used to calculate later interest, affecting effective rates and future value.
Future value is the amount a present balance or cash-flow stream reaches at a specified date under stated rates, timing, and reinvestment assumptions.