Joy is taking out a car loan which she will pay back with interest. Which option will require her to pay the lowest amount in interest?
a. Annual Compounding
b. Semi-Annual Compounding
c. Monthly Compounding
d. Daily Compounding
the option that will require her to pay the lowest amount in interest is: A. annual compounding
In annual compounding, the additional value of the initial investment will be counted after the period of one year. The amount will be significantly lower compared to the compound interest that added more than once a year.
