Compounding
Compounding is the process of finding the future value of a single payment or series of payments.
Definitions
According to Financial Management Theory and Practice by Eugene F. Brigham and Michael C. Ehrhardt (13th edition),
- Compounding. The process of finding the future value of a single payment or series of payments.
According to Fundamentals of Financial Management by Eugene F. Brigham and Joel F. Houston (15th edition),
- Compounding. The arithmetic process of determining the final value of a cash flow or series of cash flows when compound interest is applied.
Related concepts
- Financial management. A combination of enterprise efforts undertaken in order to procure and utilize monetary resources of the enterprise.
