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Finance Dictionary and Glossary of Investment Terms
The process of accumulating the time value of money forward in time on a continuous, or instantaneous, basis. Interest is earned constantly, and at each instant, the interest that accrues immediately begins earning interest on itself.
The process of earning interest on top of interest. The interest is earned constantly, and immediately begins earning interest on itself.
The process of calculating interest and adding it to existing principal and interest at infinitely short time intervals.