For a given single sum invested at 8% for four years,how will the future value be affected if the compounding period is changed from quarterly to annually?
A)The future value will decrease.
B)The future value will increase.
C)The future value will stay the same.
D)There is not enough information to determine the impact.

Question

Quizplus · Accepted Answer

When the compounding period is changed from quarterly to annually, the frequency of compounding decreases, resulting in a lower future value.

For a Given Single Sum Invested at 8% for Four