Mathematics, 22.09.2020 01:01 mmvill0809
Certain investments compound interest at different intervals. What effect does the size of the compounding interval have
on the yield of the investment?
a. Investments with smaller compounding intervals have a higher yield, because the interest
earned is reinvested more quickly and thus gains compound interest more quickly.
b. Investments with smaller compounding intervals have a lower yield, because the interest earned
is smaller at each interval.
c. The size of the compounding interval does not affect the total yearly interest percentage rate and
only exists for bookkeeping purposes.
d. Investments with smaller compounding intervals have a lower yield, because the bank charges
a small fee every time interest is compounded.
Answers: 2
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Certain investments compound interest at different intervals. What effect does the size of the compo...
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