What effect does compounding interest more frequently than annually have on its future value and the effective annual rate (EAR)?
DQ1 What effect does compounding interest more frequently than annually have on its future value and the effective annual rate (EAR)? Explain. How would you explain the difference between the annual percentage rate (APR) and effective annual rate (EAR) to a friend with no background in finance?
DQ2 Provide an example, with rationale, of an area in your personal life where you would like to apply time value of money concepts. What can you do to create a more financially sound future for yourself?
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