Compounding


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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.

Compounding

The process of earning interest on a loan or other fixed-income instrument where the interest can itself earn interest. That is, interest previously calculated is included in the calculation of future interest. For example, suppose someone had the same certificate of deposit for $1000 that pays 3%, compounding each month. The interest paid is $30 in the first month (3% of $1,000), $30.90 in the second month (3% of $1,030), and so forth. In this situation, the more frequently interest is compounded, the higher the yield will be on the instrument. See also: Amortization, Time value of money, Simple interest.

Compounding.

Compounding occurs when your investment earnings or savings account interest is added to your principal, forming a larger base on which future earnings may accumulate.

As your investment base gets larger, it has the potential to grow faster. And the longer your money is invested, the more you stand to gain from compounding.

For example, if you invested $10,000 earning 8% annually and reinvested all your earnings, you'd have $21,589 in your account after 10 years.

If instead of reinvesting you withdrew the earnings each year, you would have collected $800 a year, or $8,000 over the 10 years. The $3,589 difference is the benefit of 10 years of compound growth.

References in periodicals archive ?
All efforts should be exercised to minimize the presence of moisture and other volatiles in raw rubber(s) and compounding ingredients.
The first priority in solving a bloom problem is to identify what compounding ingredient(s) is causing the bloom (the appearance alone may not be sufficient to make this identification).
Coperion supplies the corotating twins in an alliance with Davis-Standard for direct-extrusion/ compounding applications.
Featuring the Swiss-built Geartruder for elastomer compounding in six models from 250 to 8800 lb/hr.
Upon approval of the proposed legislation, which is expected to be effective during the first quarter 2005, the Company expects to first market its contract compounding services to pharmacies throughout Southern California and then expand nationwide.
They are a facility in Burlington that makes rigid vinyls, and a second in Farmingdale that does laboratory work and compounding.
Second, CTi's strong engineering plastics compounding business will add breadth to our specialty compounding portfolio throughout the world," Walker continued.
Contact a Biltrite Industries Sales Representative to discuss your custom nlbber mixing, Calendering and slitting and compounding requirements at:
Once this baseline is established, as well as a con-elation with downstream quality problems, a Six Sigma team (representing different areas of manufacturing, compounding and laboratory testing) brainstorms on possible assignable causes of this variation.
Day two of the course will include presentations on compounding chlorinated polyethylene and ethylene octene elastomer, black fillers and non-black fillers in elastomers, and compounding vinyl ethylene elastomer and ethylene/acrylic elastomer.
Included in the acquisition is a compounding plant in Peachtree City, Ga.
The sample made by compounding pulp directly into the rubber shows significant color differences indicating relatively poor fiber dispersion; the sample prepared using engineered elastomer is nearly a uniform color, demonstrating its excellent dispersion.