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Essay text:
Compound interest is the basic investing and banking concept that the principal plus interest earns interest thus increasing the value of the money invested. Good investment strategy weighs heavily on the interest rate which plays a major role in determining return on investment. With a higher interest rate, the return on investment increases which provides more money to the investor.
When businesses develop strategies to increase its net worth or capital, a determination must be made on how much money is needed to achieve their financial goals. Present value of money should be evaluated to ensure that the original investment can be increased due to interest that it will earn over time...
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