What is Compound Finance? - finder.com

Compound Finance is a decentralized lending and borrowing protocol built on the Ethereum blockchain. Lenders can deposit funds in exchange for a return on their …

Compounding multiplies money at an accelerated rate and the greater the number of compounding periods, the greater the compound interest will be.

KEY TAKEAWAYS

• Compound interest is interest calculated on the initial principal, which also includes all of the accumulated interest from previous periods.

• Generating "interest on interest" is known as the power of compound interest.

• Interest can be compounded on any given frequency schedule, from continuous to daily to annually.

• Compounding multiplies money at an accelerated rate.

• How Compound Interest Works

  Compound interest is calculated by multiplying the initial principal amount by one plus the annual interest rate raised to the number of compound periods minus one. The total initial is then subtracted from the resulting value.