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Compounding |
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Compounding The ability of an asset to generate earnings that are then reinvested and generate their own earnings. Notes: Making interest on interest, the power of compounding interest is truly magical. At 15% interest for 25 years, $10,000 would grow to $330,000!Compounding The process of accumulating the time value of money forward in time. For example, interest earned in one period earns additional interest during each subsequent time period. |
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