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    Daily vs. Monthly Compounding

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    I need an explanation how to resolve this question or an example

    © BrainMass Inc. brainmass.com October 10, 2019, 7:10 am ad1c9bdddf
    https://brainmass.com/business/cash-management/daily-vs-monthly-compounding-570723

    Solution Preview

    Please see the calculations in the attached Excel sheet.

    Given the same nominal rate, more frequent compounding will always result in a higher effective rate, because ...

    Solution Summary

    We compare daily and monthly compounding, showing the exact calculations for each and which results in a higher effective rate.

    $2.19