Doubling the frequency of compounding in a compound interest investment will not double the amount of the interest.

Question

Quizplus · Accepted Answer

Doubling the frequency of compounding increases the amount of interest, but due to the exponential nature of compound interest, it does not double the amount of interest earned. The increase is due to more frequent application of the interest rate, but the effect is not linear.

Doubling the Frequency of Compounding in a Compound Interest Investment