A first saving account pays 5% compounded annually. A second saving account pays 5% compounded continuously. Which of the two investments is better in the long term?

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asked Sep 13, 2022 70.4k views

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Nick Marinakis · Answer 1 · 2022-09-19T15:34:21+0000

The account that’s compounded continuously is the better investment long-term because you accrue interest on top of interest on a daily basis which grows exponentially.

A first saving account pays 5% compounded annually. A second saving account pays 5% compounded continuously. Which of the two investments is better in the long term?

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