Compounding is the method through which interest is added to both the principle balance already in place and the interest that has already been paid. Thus, compound application can be thought of as interest on interest, with the result that returns on interest are magnified over time, or the so-called "magic of compounding."
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Compounding is the method through which interest is added to both the principle balance already in place and the interest that has already been paid. Thus, compound application can be thought of as interest on interest, with the result that returns on interest are magnified over time, or the so-called "magic of compounding."
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