1. Which compounding method, at 6%, earns more money? (a) Semiannually (b) Monthly 2. If $1000 is...

Question:

1. Which method, at 6%, earns more money?
(a) Semiannually
(b) Monthly
2. If $1000 is invested for 4 years at 8%, compounded quarterly, how much interest will be earned?
3. How much must one invest now in order to have $18,000 in 4 years if the investment earns 5.4%, compounded monthly?
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. This growth, calculated using exponential functions, occurs because the investment will...