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    Compounding, Time-Value of Money and Retirement Planning

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    Need some help in writing a 1 page brief explaining compounding, the time value of money, and the importance of retirement planning and investing.

    Please include the references and please do not copy the references word for word.

    © BrainMass Inc. brainmass.com October 9, 2019, 10:37 pm ad1c9bdddf
    https://brainmass.com/business/the-time-value-of-money/compounding-time-value-money-retirement-planning-226565

    Solution Preview

    Compounding:

    From a layman's perspective, compounding can be referred to the process of generating earnings from previous earnings, that has been reinvested. In other words, it is the process wherein earnings generated by an asset are reinvested in order to generate more earnings via that additional investment. For example, let's say that interest earned on $100 for 1 year @5%, ie, $5 is reinvested in the principal amount of $100, which makes the total principal $105. Now, from 1st year onwards, interest will be generated on $105 (the new principal amount after reinvested interest), instead of $100 ...

    Solution Summary

    Need some help in writing a 1 page brief explaining compounding, the time value of money, and the importance of retirement planning and investing.

    $2.19