Investment Fundamentals

Compounding

Definition

What is Compounding?

The process by which returns earn additional returns over time.

Example in practice

At 10% annually, ₦100,000 grows to ₦121,000 after two years when returns compound.

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The original amount of money invested or lent, excluding later returns.

Money or other resources committed to produce income, growth, or another economic benefit.

An asset or commitment of money made with the expectation of future income, growth, or both.

Anything with economic value that can be owned or controlled.

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