# This problem demonstrates the dependence of an annuitys present value on the compounding frequency. What minimum initial

## Question:

a. 6% compounded annually?

b. 6% compounded semiannually?

c. 6% compounded quarterly?

d. 6% compounded monthly?

Annuity

An annuity is a series of equal payment made at equal intervals during a period of time. In other words annuity is a contract between insurer and insurance company in which insurer make a lump-sum payment or a series of payment and, in return,... Compounding

Compounding is the process in which an asset's earnings, from either capital gains or interest, are reinvested to generate additional earnings over time. This growth, calculated using exponential functions, occurs because the investment will...

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