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Use an Illustration to Show the Difference Between Annual,semi-Annual,monthly and Daily

question 16

Essay

Use an illustration to show the difference between annual,semi-annual,monthly and daily compounding.Give examples and illustrations using numbers from real life for each one.


Definitions:

Random Variable

A numerical variable that reflects the outcomes of an unpredictable event.

Standard Normal Distribution

A normal distribution with a mean of 0 and a standard deviation of 1, used in statistical analysis.

Mean

The average of a set of numbers, calculated by dividing the sum of all the numbers by the count of numbers.

Standard Error

The standard deviation of the sampling distribution of a statistic, most commonly the mean; it is used to estimate the efficiency, accuracy, or precision of a sample-based estimate.

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