All categories

3 years ago

You are opening a savings account that earns compound interest. Which compounding frequency will earn you the MOST money?

1 answer:

3 0

In general, it is true that if the frequency is higher, then you make more money. For example, suppose you have a capital 1$ and the interest rate can be either 50% compunded annually or 25% compounded semiannually (same total interest in a year, different compounding rate). In the first case you get 1.5$ back at the end of the year, while in the second case after 1 semester you have 1.25$. After 2 semesters, you have 1.56$. You cannot make infinite money this way though; you can at most gain a factor of 2.7 by reducing the intervals of compounding.
The correct answer is the highest frequency, namely when the interest is compounded as frequently as possible (as long as the total interest rate is the same).

You might be interested in

A pizza monopolist employing third-degree price discrimination charges students $10 per pizza and everyone else $15 per pizza St

tangare [24]

Answer:

The price elasticity of demand for the students is:

inelastic.

Explanation:

The price elasticity of demand for the students is inelastic because there is no change in the quantity demanded by students that changes the price at which pizza is sold to the students. If one student buys the pizza, the price charged remains $10 and if 1,000 students buy the pizza, the price remains $10 per unit. Therefore, students' demand for the pizza is said to be static irrespective of price because the price is fixed.

8 0

2 years ago

Select all that apply.

Semenov [28]

Answer:

Wildlife conservationists.

Explanation:

Wildlife conservationists are those people who do the practice of protecting wild species and their habitats to prevent species from going extinct. If anyone wants to make a career in Agriculture, Food & Natural Resources, he/she must have to know which species are endangered now and which species might be endangered in the future. Along with this, they must have to understand how those species could be saved from being extinct. After knowing all of these, he/she might select their career as a wildlife conservationist. Among the other three professions which are said in question aren't possible to choose from the side of a person who knows Agriculture, Food & Natural Resources.

7 0

2 years ago

Read 2 more answers

Willingness to pay

alex41 [277]

Answer:

The correct answer is option a.

Explanation:

The willingness to pay for a product can be defined as the maximum amount an individual is willing to procure or obtain a product. The price of a product lies between a consumer's willingness to pay and a seller's willingness to accept.

The willingness to accept is the minimum amount a seller is willing to accept to let go of a product. Willingness to pay indicates how valuable good is for the buyer.

4 0

3 years ago

How does investing in the stock market differ from putting money in a savings account at a bank?

n200080 [17]

Answer:

d. you have the opportunity to make more money when you invest compared to what you can earn putting your money in a savings account

5 0

3 years ago

Last year real GDP in the imaginary nation of Populia was 907.5 billion and the population was 3.3 million. The year before real

podryga [215]

Answer:

=10%

Explanation:

Real GDP per capital is the GDP per individual in an economy. The formula for calculating real GDP per capital is

Real GDP per capital real GDP/ population

Last year real GDP per capital would be 907,500,000,000/ 3,300,000,000

=907,500/ 3,300

=275

the previous real GDP is 750,000,000,000/3,000,000

=750,000/3,000

=250

increase in GDP is 275-250= 25

Percentage increase

=25/250 x 100

=0.1 x 100

=10%

7 0

2 years ago