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31 July, 09:30

Mike has a choice of an account that compounds daily and an account that compounds monthly. If they both have the same interest rate, which will earn more interest?

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  1. 31 July, 11:47
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    Mike has a choice of an account that compounds daily and an account that compounds monthly. If they both have the same interest rate, which will earn more interest?

    Answer:

    Account that is being compounded on a daily basis will earn more interest. This is because in simple words, one is getting some interest on a daily basis and one will yield an 'interest on interest'. Whereas in a monthly compounded account Mike will earn less interest.
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