4 a.

Which of the following provides the greatest annual interest and highest future value?

I.

15% compounded annually

II.

15% compounded semiannually

III.

15% compounded monthly

IV.

15% compounded weekly

V. None of the above

b.

If you have $10,000 to invest today, which of the following will give you highest future value?

I. 10% per year, compounded annually

II. 10% per year, compounded semiannually

III. 10% per year, compounded quarterly

IV. 10% per year, compounded daily c.

In calculation of time value of money, the frequency of compounding the interest rate has a _________ relationship to the present value and _________ relationship to the future value of an investment.

		positive; positive
		negative; positive
		negative; negative
		positive;negative