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A digital picture can be enlarged in size by adding new pixels to the existing grid. Some camera and scanner software do this as the picture is processed to give higher resolution results. The fact is, interpolation increases the picture by guessing what pixels are required and uses information from the surrounding pixels to achieve this. Although the overall picture count will rise image quality can actually suffer and definition is often reduced.
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Another name for interpolation where pixels are added or removed to change the physical size of the image.