Compounding refers to the growth process that turns $1 today into a greater value several periods in the future.

Name: Compounding refers to the growth process that turns $1 today into a greater value several periods in the future.
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Compounding is the process by which an asset's earnings, from either capital gains or interest, are reinvested to generate additional earnings over time. This leads to exponential growth and a greater value of the asset in the future.

Compounding Refers to the Growth Process That Turns $1 Today