From Longman Business Dictionarycompound rateˈcompound rate (also compounded rate)FINANCEBANKING an interest rate based on the PRINICIPAL (=the original amount invested or borrowed) and on the interest payments received earlier on an investment, or the amount remaining to be repaid on a loanLeft untouched for five years, an investment of £100 in the Series A bond is guaranteed to grow to £176.24, a compound rate of 12% per year. → rate
