What happens to the amount of interest earned when interest is compounded more frequently?
حاصل شدہ سود کی رقم کا کیا ہوتا ہے جب سود کو زیادہ کثرت سے مرکب کیا جاتا ہے؟
Answer: Interest earned increases
Explanation
When interest is compounded more frequently, the interest earned increases.
Because the interest is calculated and added to the principal more often.
It creating a snowball effect that leads to higher earnings over time.
This question appeared in
Past Papers (2 times)
OG iii Officer Grade III Past Papers (1 times)
ZTBL OG III Past Papers and Syllabus (1 times)
Related MCQs
- Which of the following represents the amount of money accumulated after n years, including interest, on a principal amount P at an annual interest rate r compounded annually?
- What happens to the effective annual rate (EAR) if interest is compounded more frequently?
- If a principal amount of $1000 earns 5% annual interest compounded quarterly, what will be the amount after 1 year?
- On October 1, 2011, Coast Financial loaned Barr Corporation $300,000, receiving in exchange a nine-month, 12 percent note receivable. Coast ends its fiscal year on December 31 and makes adjusting entries to accrue interest earned on all notes receivable. The interest earned on the note receivable from Barr Corporation during 2012 will amount to _____?
- If principle = Rs 1,00,000, rate of interest = 10% compounded half yearly. find the amount after one year.
- If $1,500 is borrowed at an annual interest rate of 10% compounded semiannually, what is the amount owed after 1 year?
- Mr. Ali borrows RS. 500 from bank for a period of 4 years. If interest rate is 11% per anum, what would be the amount of interest he has to pay back in addition to the principal amount?
- Which factor does NOT affect the amount of simple interest earned?
- Which term describes the interest earned on both the initial principal and the interest that has been added to it?
- If a sum of $1200 is invested at an annual simple interest rate of 5% for 2 years, what is the total interest earned?
