curtain investments compound interest at different intervals. What effect does the size of the compounding interval have on the yield of the investment?

As the compounding frequency increases, the yield increases as well. But there's a limit to that increase.

Consider depositing $100 into an account at 5% interest. Let's consider a timespan of 1 year. These values were picked arbitrarily.

Using the formula A = P(1+r/n)^(nt), we can find the various yield amounts when n varies

The table below shows how A changes based on the values of n. I've let P = 100, r = 0.05 and t = 1.

As n gets larger, the value of A slowly approaches 105.13 when you round to the nearest penny.

So eventually the investment yield hits a ceiling of some sort.  We cannot make the investment grow forever in some fixed amount of time (in this case 1 year).

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