> For the complete documentation index, see [llms.txt](https://degentechxtz.gitbook.io/aliensfarm/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://degentechxtz.gitbook.io/aliensfarm/untitled/what-is-a-compound.md).

# What is a Compound

Compound or compound interest is the addition of interest to the principal sum of a loan or deposit, or in other words, interest on interest. It is the result of reinvesting interest, rather than paying it out, so that interest in the next period is then earned on the principal sum plus previously accumulated interest.