in order to compound it, you need to spend it.
there is a one hour setback and with txfee, the optimum is maybe a daily tx. not sure.
an extra 0.1% per year or so can be gained by compounding
Okay, that means the interest rate for interest is 0.1% if I do not transfer the received interest. Now if I transfer the 1.3 KMD from address A to B and back to A (transaction costs of 0.002 KMD), 5% interest is paid on the whole 10.001,3 KMD, right?
5% APR is paid on utxo that are more than 10 KMD and older than an hour.
That is the rule. So if you just spend a utxo, then both the destination and the change address are utxo that follows the rules.
Just spend funds (to yourself or anybody else) and the change address comes back and will start earning interest after an hour. At the rate of 5% per year. If you are actively using KMD, there is nothing really extra you need to be doing.
The rule is 5% APR is paid on the entire utxo that is more than 10 KMD and older than an hour. The one hour is subtracted from the age for interest calculations
it doesnt matter how many times you spend it or not, if a utxo is for more than 10 KMD, after an hour it starts earning 5% interest
due to fixed txfee regardless of tx size, there is a very slight bias in favor of larger utxo, meaning there is an incentive to combine many small utxo into bigger ones, especially if they are smaller than 10 KMD. This has the effect of reducing the total number of utxo and a smaller memory usage, though the difference wont really be noticeable for quite a while