Compounding period definition
/What is a Compounding Period?
A compounding period is the span of time between when interest was last compounded and when it will be compounded again. For example, annual compounding means that a full year will pass before interest is compounded again. When interest compounding occurs, interest is added to the principal on a loan. A lender may engage in more aggressive monthly or quarterly compounding, which increases the amount to be repaid by the borrower.