Discounting Compounding means that interest earned each year, plus the principal, will be reinvested at the stated rate.
Changed as original answer incorrect.Discounting is the same as compounding but in different time order.(PV compounds to FV; FV discounts to PV)

Question

Quizplus · Accepted Answer

Discounting and compounding are opposite processes. Compounding involves earning interest on the initial principal and all accumulated interest, while discounting involves calculating the present value of a future amount by reducing it to its equivalent value in today's dollars.

Discounting Compounding Means That Interest Earned Each Year, Plus the Principal