alleryStart learning →What does compounding frequency measure?
AThe size of the principal
BThe length of a loan term
CTotal interest earned in a year
DHow often interest is capitalised
Answer & Solution
Correct answer: D. How often interest is capitalised
It is how often accumulated interest is added to the balance per unit of time.
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Related questions
What principal grows to Rs 9,261 in 3 years at 5% compounded annually?CI on a sum at 10% for 2 years is Rs 2,310. What is the sum?At simple interest, a sum equals its interest after 5 years. Rate?Simple interest is one quarter of the sum, and the rate equals the years. Rate?A loan is cleared by two equal yearly instalments of Rs 1,210 at 10% CI. Loan amount?At 20% annually on Rs 1,000 for 2 years, how much more is CI than SI?Rs 5,000 earns 10% in year one and 20% in year two as compound interest. Final amount?A rate of 9% per annum means how much interest on each Rs 100 in a year?