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Part 1-- The process of discounting and compounding are related. Please explain this relationship. Part 2--Suppose you...

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Finance

Part 1-- The process of discounting and compounding are related.Please explain this relationship.

Part 2--Suppose you were considering depositing your savings inone of three banks, all of which pay 5 percent interest. Bank Acompounds annually and Bank B compounds semiannually. What bankwould you chose? Please explain why?

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1 The process of discounting and compounding are related Required rate of return is either used to find the present value of future cash flows or to find the future value of a series of cash flow The process of finding the present value is known as discounting and the process of calculating future    See Answer
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Part 1-- The process of discounting and compounding are related.Please explain this relationship.Part 2--Suppose you were considering depositing your savings inone of three banks, all of which pay 5 percent interest. Bank Acompounds annually and Bank B compounds semiannually. What bankwould you chose? Please explain why?

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