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2. Assuming that you can count on an annual interest rate of 10%, which is more valuable: for Grandma
to give you $10,000 now (which you can invest) or $30,000 ten years from now? Justify your
answer.
3. Which has a greater effect: changing compounding annually to quarterly, changing quarterly to
monthly, or changing monthly to daily?
4. Try to explain in words, what you think compounding continuously would mean. Based on question
#3, do you think it would be significantly different from compounding daily?
8.2 Time Value of Money