Compounding Monthly Versus Annually Causes the Interest Rate to Be

question 161

Multiple Choice

Compounding monthly versus annually causes the interest rate to be effectively higher, and thus the future value

• A) grows.
• B) decreases.
• C) is independent of the monthly compounding.
• D) is affected only if the calculation involves an annuity due.

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Definitions:

CIO

Stands for Congress of Industrial Organizations, a federation of unions that organized workers in industrial unions in the United States and Canada from 1935 to 1955.

Immigrant Groups

Communities of people who have moved from one country to settle in another, often forming distinct cultural or social groups.

New Deal

A series of programs, public work projects, financial reforms, and regulations enacted in the United States during the 1930s in response to the Great Depression.