I'm not grasping the concept of how to solve for the different periods of time.
We have: .1. Suppose you deposit $20,000 for 3 years at a rate of 8%.
We have: .(a) Calculate the return if the bank compounds quarterly
We have: .(b) Calculate the return if the bank compounds monthly .
We have: .(c) Calculate ther return if the bank compounds daily .
As the compounding becomes more frequent, the amount returned increases.(d) What observation can you make about the size of the increase in your return
as your compounding increases more frequently?
But the size of the increases is getting smaller.
. . From quarterly to monthly, the increase is:
. . From monthy to daily, the increase is:
Hope this helps . . .