Explore commonly used personal finance terms.
Accumulated interest is the total interest that has accrued on a loan or investment but has not yet been paid out. This is common in bonds, where interest accumulates between payment periods and is paid on a scheduled date. Accumulated interest is recorded as an asset for the lender and a liability for the borrower until the payment is made. It is important in financial reporting and investment analysis, as it reflects earned income or incurred cost within a specific period, impacting cash flow and overall financial health.
