Describe the process of compounding and the meaning of compound interest.
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Compounding
Compounding is the process in which an asset's earnings, from either capital gains or interest, are reinvested to generate additional earnings over time. This growth, calculated using exponential functions, occurs because the investment will...
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Compounding is an arithmetic process whereby an initial value increases or grows at a compo...View the full answer
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Related Book For 
Introduction to Finance Markets Investments and Financial Management
ISBN: 978-1118492673
15th edition
Authors: Melicher Ronald, Norton Edgar
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