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  • 13-01-2021
  • Business
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What is the difference between compounding (the determination of future value) and discounting (the determination of present value)

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Zviko
Zviko Zviko
  • 14-01-2021

Answer:

Compounding is the addition of the Interests to the Present Value to arrive at the Future Value. While discounting is the deduction of interest charges from thee Future Value to arrive at the Present Value.

Explanation:

Compounding is the addition of the Interests to the Present Value to arrive at the Future Value. While discounting is the deduction of interest charges from thee Future Value to arrive at the Present Value.

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