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adastra22
18 days ago
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Boring is what we wanted
You are both right. What is compounding? It is when you add the gains, year by year.
yxhuvud
18 days ago
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The gains are multiplied though, no?
adastra22
18 days ago
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In the vocabulary of finance you don't multiply in gains, you add them. It probably historically derives from dividends being added. At the transactional level you never actually multiply money, after all (unless you're a bank).
TheFuzzball
18 days ago
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What is multiplication if not adding over time?
paulsutter
17 days ago
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Everyone is right! It’s a multiply-accumulate (accumulate of course a synonym for add)
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