Compounding is the process of earning interest on the principal invested. Many investment professionals believe that investments with a high rate of return and compound interest can produce a high amount of wealth.
Compounding is the process of earning interest on previously earned interest. It is one of the most powerful strategies you can use to make money in an investment portfolio. Let's say you decide to invest $100 per month in a particular product with an annual rate of return of 8%. After 10 months, your investment portfolio would be worth $1,200.
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