ECONOMICS
SAVING AND INVESTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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scarcity.
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budgeting.
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uniformity.
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compounding.
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Detailed explanation-1: -What Is Compounding? Compounding is the process in which an asset’s earnings, from either capital gains or interest, are reinvested to generate additional earnings over time.
Detailed explanation-2: -Compounding is a powerful investing concept that involves earning returns on both your original investment and on returns you received previously. For compounding to work, you need to reinvest your returns back into your account.
Detailed explanation-3: -Power of compounding is essentially an act of ‘adding interest on interest, ’ i.e. the amount of money you invest will generate earnings from both the initial principal amount and the accrued earnings from preceding compounding periods. Eventually, thus, power of compounding helps grow your wealth over time.
Detailed explanation-4: -What is compounding? Drug compounding is often regarded as the process of combining, mixing, or altering ingredients to create a medication tailored to the needs of an individual patient. Compounding includes the combining of two or more drugs. Compounded drugs are not FDA-approved.
Detailed explanation-5: -Compounding Definition Compounding is the returns earned from interest on an existing principal amount, as well as on interest already paid.