Compounding frequency
The number of compounding periods in a year. For example, quarterly compounding has a compounding frequency of 4. |
Similar financial terms
CompoundingThe process of accumulating the time value of money forward in time. For example, interest earned in one period earns additional interest during each subsequent time period.
Compounding period
The length of the time period (for example, a quarter in the case of quarterly compounding) that elapses before interest compounds.
Continuous compounding
The process of accumulating the time value of money forward in time on a continuous, or instantaneous, basis. Interest is earned continuously, and at each instant, the interest that accrues immediately begins earning interest on itself.
Reset frequency
The frequency with which the floating rate changes.
