Compound interest is a fundamental concept in finance that refers to the calculation of interest on interest, allowing the initial capital to increase exponentially over time. Key factors of compound interest include interest rate, time period, compounding frequency, and initial principal. Factors that we must find in any compound interest calculator:[5]​.

In the past, there were often religious or secular rules relating to the prohibition of interest, or compound interest specifically. They were prohibited to prevent the debtor from being crushed by these interests.

Compound interest is as old as the simple interest from which it is derived. It is believed that the Sumerians, around , were the first to coin the concept of interest (maš, in Spanish calf) and compound interest (mašmaš). In the year , under the reign of Enmetena, a forgiveness of debts was enacted motivated by their growth due to compound interest. Compound interest is permitted in the Code of Hammurabi (Babylon) on the condition that outstanding unpaid interest is kept separate from the principal and capitalized by the creditor for the debtor. This procedure was intended to protect people from unethical debtors.

In Roman Law the compound capital is called usurae usurarum. The Romans knew of a loan called mutuum, without interest, which was granted as a favor to relatives or friends. In the 2nd century, the Emperor Justinian prohibited cases in which late payment interest exceeded the amount of the capital, as it had even doubled (ultra alterum tantum)..

In Judaism there was no compound interest, and simple interest was subject to many limitations. Between the year 1000 and 1000, it was prohibited to charge interest to the poor. In Deuteronomy it says: “You shall not charge your brother interest: interest on money, food, or anything that can be lent at interest. You may charge interest to a foreigner, but you shall not charge interest to your brother so that the LORD your God may bless you in everything you undertake in the land that you are going to enter to possess...."[6]​.

With Christianity came severe criticism of interest payments. Those in a difficult situation should not be charged any interest. We read in Leviticus 25:36:.

«In case a brother of yours becomes poor and his means towards you decline, you will support him as a stranger or pilgrim, so that he may live with you. Do not take interest and usury from him, but fear your God, so that your brother may live with you. You will not give him your money at interest, nor your provisions at profit.

Already in the fifth book of Moses the charging of interest is prohibited. (Deuteronomy 23: 20, 21).

You may charge interest to a foreigner, but you shall not charge interest to your brother so that the Lord your God may bless you in everything you undertake in the land you are going to enter to possess. When you make a vow to the Lord your God, you will not delay in paying it, because the Lord your God will certainly demand it from you, and it would be sin on you.[7]​.

In the Middle Ages, canon law classified the collection of interest, simple or compound, as theft. Islam did the same; There are several surahs that deal with its prohibition. In Sura 2:275 Allah states that contracts of sale are permissible (they are halal), but interest is prohibited (haram). The Italian mathematician Leonardo Fibonacci presented, in 1228, new calculations of compound interest based on the Julian calendar.

Compound interest is a fundamental concept in finance that refers to the calculation of interest on interest, allowing the initial capital to increase exponentially over time. Key factors of compound interest include interest rate, time period, compounding frequency, and initial principal. Factors that we must find in any compound interest calculator:[5]​.

In the past, there were often religious or secular rules relating to the prohibition of interest, or compound interest specifically. They were prohibited to prevent the debtor from being crushed by these interests.

Compound interest is as old as the simple interest from which it is derived. It is believed that the Sumerians, around , were the first to coin the concept of interest (maš, in Spanish calf) and compound interest (mašmaš). In the year , under the reign of Enmetena, a forgiveness of debts was enacted motivated by their growth due to compound interest. Compound interest is permitted in the Code of Hammurabi (Babylon) on the condition that outstanding unpaid interest is kept separate from the principal and capitalized by the creditor for the debtor. This procedure was intended to protect people from unethical debtors.

In Roman Law the compound capital is called usurae usurarum. The Romans knew of a loan called mutuum, without interest, which was granted as a favor to relatives or friends. In the 2nd century, the Emperor Justinian prohibited cases in which late payment interest exceeded the amount of the capital, as it had even doubled (ultra alterum tantum)..

In Judaism there was no compound interest, and simple interest was subject to many limitations. Between the year 1000 and 1000, it was prohibited to charge interest to the poor. In Deuteronomy it says: “You shall not charge your brother interest: interest on money, food, or anything that can be lent at interest. You may charge interest to a foreigner, but you shall not charge interest to your brother so that the LORD your God may bless you in everything you undertake in the land that you are going to enter to possess...."[6]​.

With Christianity came severe criticism of interest payments. Those in a difficult situation should not be charged any interest. We read in Leviticus 25:36:.

«In case a brother of yours becomes poor and his means towards you decline, you will support him as a stranger or pilgrim, so that he may live with you. Do not take interest and usury from him, but fear your God, so that your brother may live with you. You will not give him your money at interest, nor your provisions at profit.

Already in the fifth book of Moses the charging of interest is prohibited. (Deuteronomy 23: 20, 21).

You may charge interest to a foreigner, but you shall not charge interest to your brother so that the Lord your God may bless you in everything you undertake in the land you are going to enter to possess. When you make a vow to the Lord your God, you will not delay in paying it, because the Lord your God will certainly demand it from you, and it would be sin on you.[7]​.

In the Middle Ages, canon law classified the collection of interest, simple or compound, as theft. Islam did the same; There are several surahs that deal with its prohibition. In Sura 2:275 Allah states that contracts of sale are permissible (they are halal), but interest is prohibited (haram). The Italian mathematician Leonardo Fibonacci presented, in 1228, new calculations of compound interest based on the Julian calendar.