What is the relationship between compounding and discounting of a lump-sum? Complete the following: "The larger the interest rate, the (larger/smaller) the future value of a value today." Holding everything else the same, what is the effect of using a higher discount rate to discount a future value to the present?
If you invest the same amount in each of three accounts today, which account produces the highest future value if the annual percentage rate is the same?
Account A: annual compounding, Account B: quarterly compounding, Account C: continuous compounding.