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TeachMeFinance.com - explain compound interest compound interest The term 'compound interest' as it applies to the area of basic math can be defined as 'a percentage of an amount that accrues based on the product of the interest rate and the sum of the principal and any previously earned interest'. Previous 5 Terms: composition of function composting Composting Compound compound Next 5 Terms: compound probability compound probability experiment Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA) Comprehensive Facility Review (CFR) About the author Mark McCracken Author: Mark McCracken is a corporate trainer and author living in Higashi Osaka, Japan. He is the author of thousands of online articles as well as the Business English textbook, "25 Business Skills in English". Copyright © 2005-2011 by Mark McCracken, All Rights Reserved. TeachMeFinance.com is an informational website, and should not be used as a substitute for professional medical, legal or financial advice. Information presented at TeachMeFinance.com is provided on an "AS-IS" basis. Please read the disclaimer for details.