Accrue means the money owed to you accumulates. if it is not compounding, that means the money that is owed to you is not earning any money. There's a big difference between the following two scenarios (taxes are excluded). i) you give me $1,000 and each year Iwill place into an account 10% of your principal and will do so for 10 years.
At the end of 10 year, you will have $2,000 (your original $1,000 plus 10 years of interest that did not compound). In this case, the money I'm giving you is accruing but not compounding. ii) You give me $1,000 and Iwill give you a compounded rate of return of 10% per year for 10 years. At the end of 10 years you would receive $2,593.74. The reason why this is so much higher is that each year you earned 10% on the total amount owing, rather than just 10% on the original $1,000. In this case, the money I'm giving you is accruing and compounding.
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