compounding
n. uncountable C1 Advanced US //kəmˈpaʊndɪŋ// UK //kɒmpˈaʊndɪŋ// com·pound·ing
n. the process of things adding up over time so they grow faster and faster. You often hear this when talking about money or interest.
n. the process by which the value of an investment increases because the earnings on an investment, both capital gains and interest, earn interest as time passes.
Compounding helps your small savings grow into a large amount.
The real power of a retirement fund comes from decades of compounding interest rather than the initial deposit.
While often discussed in finance, the principle of compounding applies equally to habit formation, where small daily improvements accumulate into significant long-term transformations.
Usage
Often functions as a gerund-noun; frequently paired with 'interest' or 'effect'.