The maximum rate of return that can be earned for a given rate of interest occurs when interest is compounded
A) annually.
B) daily.
C) monthly.
D) continuously.

Question

Quizplus · Accepted Answer

The maximum rate of return for a given interest rate occurs when interest is compounded continuously. This is due to the mathematical limit of the compound interest formula as the number of compounding periods per year increases to infinity, described by the formula A = Pe^(rt), where e is the base of the natural logarithm, approximately equal to 2.71828.

The Maximum Rate of Return That Can Be Earned for a Given