For a given rate of interest,the total interest you receive from lending money
A) increases with the frequency of compounding.
B) decreases with the frequency of compounding.
C) is independent of the frequency of compounding.
D) is greatest when there is no compounding.

Question

Quizplus · Accepted Answer

As the frequency of compounding increases, the interest earned on the principal also increases. This is because interest is earned not only on the initial principal but also on the accumulated interest. Therefore, the total interest you receive from lending money increases as the frequency of compounding increases.

For a Given Rate of Interest,the Total Interest You Receive