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  1. Home
  2. /Glossary
  3. /Compound Interest
Back to Glossary
traditional-finance

Compound Interest

Interest calculated on both the initial principal and accumulated interest from previous periods.

Definition

Interest calculated on both the initial principal and accumulated interest from previous periods. It's why 'interest on interest' makes your money grow exponentially over time. Einstein allegedly called it the eighth wonder of the world.

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Related Terms

Yield

The income earned on an investment, expressed as a percentage.

Staking

Locking up tokens to help secure a proof-of-stake network and earn rewards.

Accredited Investor

Someone who meets specific income or net worth thresholds set by regulators, qualifying them for investments not available to the general public.

Anti-Money Laundering (AML)

Laws and procedures designed to prevent criminals from disguising illegal funds as legitimate income.

Asset Allocation

How you divide your investments across different asset classes like stocks, bonds, crypto, and cash.

Blue Chip

A well-established, financially sound company or crypto project with a proven track record.

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