What effect does compounding interest more frequently

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A) What effect does compounding interest more frequently than annually have on (a) the future value, and (b) the effective annual rate (EAR)? Explain. How would you explain the difference between the annual percentage rate (APR) and effective annual rate (EAR) to a friend with no background in finance?

B) Provide an example scenario with rationale of an area in your personal life in which you would like to apply, or have already applied, time value of money concepts. What might you do differently to effect a more financially sound future?

Reference no: EM131035746

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