Asked by Erica Doherty on May 09, 2024
Verified
The future value of a single sum will increase more rapidly when the frequency of compounding decreases.
Compounding
Compounding is the process in which an asset's earnings, from either capital gains or interest, are reinvested to generate additional earnings over time.
- Learn about the significance of the frequency at which compounding occurs on future financial values.
Verified Answer
DG
Devin GoodwynMay 10, 2024
Final Answer :
False
Explanation :
The future value of a single sum increases more rapidly with an increase in the frequency of compounding because interest is calculated and added to the principal more frequently, leading to a higher overall amount.
Learning Objectives
- Learn about the significance of the frequency at which compounding occurs on future financial values.
Related questions
Jamie Deposits $1,000 into an Account That Pays 4% Interest ...
Calculating Present Value and Future Value Using Simple Interest Will ...
What Amount Can Be Paid at the End of Every ...
The National Museum Has Received a Donation of $2,000,000 Which ...
A Donation of $250,000 Is Made Today to the Local ...