Question
Assuming the same interest rate, the future value of an amount compounded semiannually is ______ the future value of that amount compounded annually.
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GPT-4o mini
Assuming the same interest rate, the future value of an amount compounded semiannually is **greater than** the future value of that amount compounded annually.
This is because when an amount is compounded more frequently (in this case, semiannually), interest is calculated and added to the principal more often, resulting in a higher total future value compared to annual compounding, where interest is calculated and added just once a year.
This is because when an amount is compounded more frequently (in this case, semiannually), interest is calculated and added to the principal more often, resulting in a higher total future value compared to annual compounding, where interest is calculated and added just once a year.
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