What is the difference between the interst on a loan being compounded daily @9% and compounded yearly @ 9%?
Interest for one year on loan of $1000 compounded n times a year at 9%
=$1000 * ( (1+0.09/n)^n - 1)
Interest for one year on loan of $1000 compounded daily (365 times a year) at 9%
=$1000*((1+0.09/365)^365-1)
Interest for one year on loan of $1000 compounded yearly (once a year) at 9%
=$1000*((1+0.09/1)^1-1)
=$1000*((1+0.09-1)
=$1000*0.09
=$90