You are considering an investment with a quoted return of 10% per year. If interest is compounded daily, what is the effective return on this investment?

Question

Quizplus · Accepted Answer

The effective return on an investment with a quoted return of 10% per year, compounded daily, is 10.52%. This is because the effective return takes into account the effect of compounding, which means that the interest earned in each period is added to the principal and earns interest in subsequent periods.

You Are Considering an Investment with a Quoted Return of 10