Explore BrainMass

Explore BrainMass

    Daily vs. Monthly Compounding

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

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

    © BrainMass Inc. brainmass.com October 10, 2019, 7:10 am ad1c9bdddf

    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.