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COMPOUND INTEREST: Interest that's added to a principal at regular intervals such that each subsequent interest calculation is based on the original principal and the added interest. For example, suppose you have a $100 savings account that pays 5 percent interest. Without compound interest, such that your 5 percent interest is paid only at the end of a year, you will have exactly $105 in one year. However, if your interest is compounded each month you end up with $105.12 after a year. The extra 12 cents comes from interest on the interest paid the first month, interest on the interest paid the second month, interest on the interest paid the third month... well I could go on.
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INVOLUNTARY EXCHANGE The process of unwillingly trading one valuable commodity (good, service, or resource) for another, usually prompted by the coercive powers of government. The key term is "unwillingly," which distinguishes involuntary exchanges from voluntary exchanges, such as those that are the foundation of market transactions.
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A lump of pure gold the size of a matchbox can be flattened into a sheet the size of a tennis court!
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"It is not fair to ask of others what you are unwilling to do yourself. " -- Eleanor Roosevelt, diplomat, activist
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IIPF
International Institute of Public Finance
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