REVIEW QUESTIONS MyLab Finance Solutions 5-20 What effect does compounding interest more frequently than annually have on (a) future value and (b) the effective annual rate (EAR)? Why? 5-21 How does the future value of a deposit subject to continuous compounding compare to the value obtained by annual compounding? 5-22 Differentiate between a nominal annual rate and an effective annual rate (EAR). Define annual percentage rate (APR) and annual percentage yield (APY)