Properties of compound interest: (1) Effect of compounding frequency: A = P(1 + r/(100m))^(mn) where m = frequency (1=annual, 2=semi-annual, 4=quarterly, 12=monthly); (2) More frequent = higher amount; (3) Continuous compounding: A = Pe^(rt). Example: P=1000, r=10% for 1 year. Annual: 1100. Semi-annual: 1000(1.05)² = 1102.5. Quarterly: 1000(1.025)⁴ = 1103.81. Effective annual rate: E.A.R. = (1 + r/(100m))^m - 1. Shortcut: Compare compounding modes using formula. Exam tip: Identify frequency carefully from problem wording. Calculate E.A.R. for comparison questions.