The future value of a $1 annuity compounded at 5% annually is greater than the future value of a $1 annuity compounded at 5% semi-annually.

Name: The future value of a $1 annuity compounded at 5% annually is greater than the future value of a $1 annuity compounded at 5% semi-annually.
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Quizplus · Accepted Answer

The future value of an annuity compounded more frequently (semi-annually in this case) will be greater than one compounded less frequently (annually) due to the effects of compounding interest more often.

The Future Value of a $1 Annuity Compounded at 5