Daryo May 11, 2020:

in practical terms, in this ST "compounding" amounts to:

"На (сваки) дан ??? ("payment date") [проста] камата која је дугована за претходни период [ако није отплaћeна тог дана] додаје се главници дуга" [и у наредном периоду наплаћује се [проста] камата на нову главницу која укључује и ту неотплаћену камату]

The variety of "compound/compounding" relevant for this text:

https://www.investopedia.com/articles/investing/020614/learn...

for more https://www.google.com/search?q=simple interest vs compound ...

Daryo May 11, 2020:

Each advance shall bear interest at the applicable rate which shall accrue from day to day on the outstanding principal amount of the advance compounding on each payment date.


Each advance = each time some amount is loaned to the company

bear interest at the applicable rate = the current interest rate will be applied to the "advanced amount"

which shall accrue from day to day on the outstanding principal amount of the advance = the interest on the outstanding principal amount is calculated every day - it's a "simple interest" calculated ONLY on the principal amount of the debt.

compounding on each "payment date" = on each "payment date" (once a month? every 3 months? depending on the contract) the "simple interest" charged /accrued since the previous "payment date" is added to the "principal amount" of the debt so this "simple interest" becomes a "compound interest" [= "is compounded" тј наплаћује се "камата на камату"]. So in the period to the next "payment date" the "principal amount" on which interest in charged includes the interest accrued/charged in the previous period between two "payment date'.