See how the effective return varies between investments with the same nominal rate, but different compounding intervals.

Initial investment $=1000000,$ what is the FV after one year?

method $1($using EAR directly$)$

method $2($Using APR$)$

Initial investment $=1000000,$ what is the FV after two years?

Method $1$ method $1($using EAR directly$)$

Method $2($Using APR$)$

converting EFF to nominal interst rate