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how does the frequency of cash flows and compounding affect wealth accumulation?

how does the frequency of cash flows and compounding affect wealth accumulation?

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Answer :- Higher the cash flows frequency i.e., cash flow generation is on very regular basis, The higher will be the accumulation of wealth and vice-versa.

Similarly, More number of times the cash flows are compounded (i.e., fast compounding effect like daily, monthly or quarterly basis as the case may be against the yearly compounding only), The more will be the wealth amount i.e., wealth will increase quickly and faster accumulation of wealth will take place.

Conclusion :- There is positive effect of cash flows frequency and effect of compounding on the accumulation of wealth in finance.

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