Definition, Meaning & Synonyms

compounding

Noun

/ˈkɒmpaʊndɪŋ/

Definition

The process of combining two or more elements to create something new or complex.

Examples

The compounding of interests can significantly increase your savings over time.
In chemistry, the compounding of different substances can produce various reactions.
The author describes how compounding languages can create richer expressions.

Meaning

In finance, compounding refers to the process where the value of an investment increases because the earnings on an investment earn interest as time passes. In general usage, it signifies the act of forming a composite by merging various components.