I'm plainly in favor of contracts allowing compount interest between individuals. Interest is what best defines the value of money and the risk of not getting it back. If it's not expressed as a %%, consindering compounding over time, you have to model around that, essentially arriving at the same numbers or being less efficient.

Let's say you borrow me $100 and I owe you back $105 next year. How much do I owe you if I pay back early or late? Would you borrow me if I paid nothing for the favor? Etc.