Compounding more than once a year (semiannually, quarterly, or monthly) will increase the interest rate and number of periods used in the calculations.

Name: Compounding more than once a year (semiannually, quarterly, or monthly) will increase the interest rate and number of periods used in the calculations.
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Question

Quizplus · Accepted Answer

Compounding more than once a year increases the number of compounding periods, but the interest rate per period is reduced accordingly to maintain the same annual interest rate.

Compounding More Than Once a Year (Semiannually, Quarterly, or Monthly)