Personal Finance Problem P5-41 Compounding frequency and time value Franois plans to invest $4,000 in an indi- vidual savings account (ISA) at a nominal interest rate of 6%. a. How much will Franois have in the account after 10 years if interest is com- pounded (1) annually, (2) semiannually, and (3) daily (assuming 365-day year). b. What is the effective annual rate (EAR) for each compounding period in c. How much greater will Franois' ISA balance be if the interest is compounded continuously rather than semiannually for the same period? d. Consider your answers in parts a, b, and c. What does it indicate about the rela- tionship between compounding frequency and the compound value for nominal interest rates? part a