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mikemcgarry
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If $5,000,000 is the initial amount placed in an account tha 30 Jan 2014, 12:22
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If $5,000,000 is the initial amount placed in an account that collects 7% annual interest, which of the following compounding rates would produce the largest total amount after two years?
(A) compounding annually
(B) compounding quarterly
(C) compounding monthly
(D) compounding daily
(E) All four of these would produce the same total

This is a relatively easy question, IF you are familiar with all the concepts related to compound interest. If you found this question easy, then great! If you are perplexed by this question, then it would be worthwhile to read this blog, which explains things in great detail:
https://magoosh.com/gmat/2014/compound-i ... -the-gmat/

Mike :-)
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If $5,000,000 is the initial amount placed in an account tha 13 Aug 2014, 22:13
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Answer = D Compounding daily

This will produce the maximum yield as the interest accured each day will be added the very next day to the Principal amount for further computation of interest.

This process will be repeated every day till the amount matures

Compounding annually will give least returns
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