Asked by
mackenzie griffith
on Dec 02, 2024Verified
An increase in the frequency of compounding will increase the future value of an investment if all other factors are held constant.
Compounding
The process whereby interest is credited to an existing principal amount as well as to interest already paid, leading to exponential growth over time.
Investment
The allocation of resources (such as capital) to assets with the expectation of generating future profit or income.
- Gain insight into how the frequency of compounding influences present and future value calculations.
Verified Answer
AA
Learning Objectives
- Gain insight into how the frequency of compounding influences present and future value calculations.