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10 cards from this deck
Rate compounded >1/year; stated rate, not true annual growth
Actual annual rate after compounding; real % increase per year
Always, when compounding is more frequent than once per year
You earn interest on interest more often with frequent compounding
(1+i)=(1+i(m)m)m(1 + i) = (1 + \frac{i^{(m)}}{m})^m(1+i)=(1+mi(m))m
Number of compounding periods per year
Always convert to effective rates first before comparing
Leads to higher accumulated amounts
Choose the option with the lower effective rate
Choose the option with the higher effective rate
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