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The Greater the Number of Compounding Periods Within a Year

question 52

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The greater the number of compounding periods within a year, then (1) the greater the future value of a lump sum investment at Time 0 and (2) the smaller the present value of a given lump sum to be received at some future date.


Definitions:

Deposit

A sum of money placed with a bank or other financial institution for safekeeping, or as partial payment in a purchasing process ensuring the buyer's intent to carry out the contract.

Refused Delivery

The act of rejecting or not accepting a delivery of goods or mail.

Unascertained Goods

Goods that have not been specifically identified or allocated to a contract at the time of its formation.

Appropriated

The act of taking something for one's own use, typically without the owner's permission.

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