Elvis Picardo is a regular contributor to Investopedia and has 25+ years of experience as a portfolio manager with diverse capital markets experience. Suzanne is a content marketer, writer, and ...

Investopedia contributors come from a range of backgrounds, and over 25 years there have been thousands of expert writers and editors who have contributed. Thomas J. Brock is a CFA and CPA with more ...

Compound interest is a favorable method of compensating lenders and depositors wherein interest is periodically credited to the principal, and subsequent interest is paid on the increasing balance.

Compound interest is a means of calculating the potential return from an investment that takes the cumulative effect of interest into account. Compound interest works by factoring in the effect of ...