Money · RATIOXA GLOSSARY
Compound interest
Returns are added to capital and generate their own future returns.
Simple definition
Returns are added to capital and generate their own future returns.
Why it matters
This term changes how inputs, cash flows or results should be interpreted. RATIOXA keeps it explicit so two options are compared on the same basis.
Worked example
€100 grows to €105 at 5%, then to €110.25 the following year.