Everything else being the same, the more frequent the compounding, the higher the future value.

Question

Quizplus · Accepted Answer

This is because more frequent compounding means that interest is being earned more frequently, which leads to a higher overall return on the investment. For example, if an investment compounds annually, it will earn interest once per year. But if it compounds daily, it will earn interest 365 times per year, resulting in a higher future value.

Everything Else Being the Same, the More Frequent the Compounding