Kamatlétesítés

Kamatlétesítés is a Hungarian term that translates to "interest capitalization" or "compounding of interest." It refers to the process where accrued interest on a loan or investment is added to the principal amount, and subsequent interest calculations are based on this new, larger principal. This effectively means that the interest earned or owed starts to earn or owe interest itself, leading to exponential growth or cost over time.

In the context of savings accounts or investments, kamatlétesítés allows for faster wealth accumulation. The interest earned is reinvested, and the interest on that interest further boosts the total return. Conversely, for loans, kamatlétesítés can significantly increase the total amount repaid over the life of the loan if payments do not cover the accrued interest. This is often seen with credit cards or loans where minimum payments are made, allowing interest to compound.

The frequency of kamatlétesítés, whether it's daily, monthly, quarterly, or annually, greatly impacts the overall effect. More frequent compounding leads to a more pronounced effect on both growth and cost. Understanding kamatlétesítés is crucial for managing personal finances, as it influences the true cost of borrowing and the potential returns on saving and investing. It is a fundamental concept in finance, underpinning many financial products and strategies.