Definition of Compounding:
Method of estimating the future value of a present investment by applying compound interest rates. Opposite of discounting.
Forbear from prosecuting (a felony) in exchange for money or other consideration.
Compounding is the process in which an asset's earnings, from either capital gains or interest, are reinvested to generate additional earnings over time. This growth, calculated using exponential functions, occurs because the investment will generate earnings from both its initial principal and the accumulated earnings from preceding periods. Compounding, therefore, differs from linear growth, where only the principal earns interest each period.
Made up or consisting of several parts or elements.
Make (something bad) worse; intensify the negative aspects of.
Make up (a composite whole); constitute.
Compounding typically refers to the increasing value of an asset due to the interest earned on both a principal and accumulated interest. This phenomenon, which is a direct realization of the time value of money (TMV) concept, is also known as compound interest. .
A thing that is composed of two or more separate elements; a mixture.
Synonyms of Compounding
Composite, Complex, Be composed of, Be made up of, Be constituted of, Be formed from, Aggravate, Worsen, Make worse, Add to, Augment, Exacerbate, Intensify, Heighten, Increase, Magnify, Amalgam, Amalgamation, Combination, Composite, Blend, Mixture, Mix, Admixture, Meld, Fusion, Synthesis, Consolidation
How to use Compounding in a sentence?
- The air smelled like a compound of diesel and petrol fumes.
- When banks or financial institutions credit compound interest, they will use a compounding period such as annual, monthly, or daily.
- A compound noun.
- Compounding can thus be construed as interest on interest—the effect of which is to magnify returns to interest over time, the so-called "miracle of compounding.".
- Compounding is the process whereby interest is credited to an existing principal amount as well as to interest already paid.
- A dialect compounded of Spanish and Dutch.
- Prisoners lack of contact with the outside world compounds their problems.
Meaning of Compounding & Compounding Definition