math

Certain investments compound interest at different intervals. What effect does the size of the compounding interval have on the yield of the investment?

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asked by jojo
  1. take a look at the graph of

    (1+.10/n)^(n)

    It shows the effective yield of 10% compounded n times per year.

    It approaches continuous compounding, e^.1

    http://www.wolframalpha.com/input/?i=plot+y%3D%281%2B.1%2Fn%29^n+for+n+%3D+1..40%2C+y%3De^.1

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    posted by Steve

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