The figure shown above shows the ________.
Definitions:
Compounding
The process by which the value of an investment increases exponentially over time due to earning interest on both the initial principal and the accumulated interest.
Present Value
is a financial concept that describes the current value of a future amount of money or stream of cash flows given a specified rate of return.
Discounting
A financial process used to determine the present value of future cash flows by applying a discount rate, which accounts for the time value of money.
Present Value
The present valuation of a series of future cash inflows or a one-time sum, based on a specified rate of return.
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