For a given stated interest rate,an investor would receive a greater future value with daily compounding as opposed to monthly compounding.

Question

Quizplus · Accepted Answer

Daily compounding means that interest is accrued and added to the investment every day, while monthly compounding means that interest is only added once a month. Therefore, with daily compounding, the investor earn more interest over time and ultimately receive a greater future value.

For a Given Stated Interest Rate,an Investor Would Receive a Greater