Compound means two or more parts,

Interest means "Interest Rate", basically a percentage

EXAMPLE:

You have $5,000 and you want to invest it at 10% per year for 5 years.

Year 1= $5000 + $5000 x 10%

=$5000 + $500

=$5500

Year 2= $5500 + $5500 x 10%

=$5500 + $550

=$6050

Year 3= $6050 + $6050 x 10% = $6655

Year 4= $6655 + $6655 x 10% = $7321

Year 5= $5000 + $5000 x 10% = $8053