Solved: Why does the future value increase, Financial Accounting

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Why does the future value increase

Response to the following problem:

What is the future value in seven years of $1,000 invested in an account with a stated annual interest rate of 8 percent,

Compounded annually?

Compounded semiannually?

Compounded monthly?

Compounded continuously?

Why does the future value increase as the compounding period shortens?

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Financial Accounting: Why does the future value increase

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Financial Accounting: Why does the future value increase

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