compounding

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. Bloomberg Financial Dictionary
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The computation of interest paid, using the principal plus the previously earned interest. Compounding measures the growth of an investment when dividends or appreciation are reinvested. NYSE Euronext Glossary

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   A process whereby the value of an investment increases exponentially over time due to compound interest.
   ► See also Compound Interest.

Financial and business terms. 2012.

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