Describe the underlying meaning of compounding and compounding periods. How does it relate to time value? Include

Question:

Describe the underlying meaning of and periods. How does it relate to time value? Include the idea of an effective annual rate (EAR). What is the annual percentage rate (APR)? Is the APR related to the EAR?

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...