ECONOMICS
SAVING AND INVESTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Annual Compounding
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Semi-annual Compounding
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Monthly Compounding
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Daily Compounding
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Detailed explanation-1: -Compound interest is often best when you’re saving money because you’ll earn interest on interest. But if you’re taking out a loan, a simple interest loan may be the better option since it could lead to less costs overall.
Detailed explanation-2: -Daily compounded interest means interest is accumulated daily and is calculated by charging interest on principal plus interest earned daily; therefore, it is higher than interest compounded on a monthly/quarterly basis due to the high frequency of compounding.
Detailed explanation-3: -Daily compounding beats monthly compounding. The shorter the compounding period, the higher your effective yield is going to be.
Detailed explanation-4: -Exchanged-Traded Funds (ETFs) Mutual Funds. Alternative Investments. Real Estate (Direct Ownership) Real Estate (Crowdfunding) Real Estate Investment Trusts (REITs) Fine Art. Cryptocurrencies. More items