The statement that encapsulation is the process of “packaging” information prior to transmitting it from one location to another is true.
This method augments the data with successive layers of control information before transmission across a network. Each OSI (Open System Interconnection) layer is part of the encapsulation by adding a header to the data packet in the transmission network.
Over time, the interest is added to the principal, earning more interest. That's the power of compounding interest. If it is not invested, the value of the money erodes over time.