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Its well known that as the number of compounding periods increases, within any fixed length of time, the effective yield (or interest rate) will increase
Its well known that as the number of compounding periods increases, within any fixed length of time, the effective yield (or interest rate) will increase as well. Discuss and illustrate the effect of compounding annually, semi-annually, quarterly, monthly, weekly, daily, hourly, etc Which natural period step-up in compounding rate is most valuable to you? That is, which increment of compounding choices returns the greatest value compared to the previous step?
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