What is Compound Interest ?

The Truth in Lending Act (TILA) requires that lenders disclose loan terms to potential borrowers, including the total dollar amount of interest to be repaid over the life of the loan and whether interest accrues simply or is compounded.

Cumulative interest is the sum of all interest payments made on a loan over a certain time period.

Compound interest is the interest paid on the original principal and on the accumulated past interest.