What does variable interest compounded daily mean?

Question

I'm a 7th grader doing a math project and I'm supposed to be looking for the meaning of these terms:

variable interest compounded daily-

credited monthly-

You know what best definitions get! POINTS!POINTS!POINTS!

Answer 1

% is money paid by a borrower to a seller -
also by a bank or financial institution to a depositor.

% rates can be calculated each day OR each month OR (very rarely) each year.

The more often it is calculated and paid , the more the actual % that is paid , because the % paid becomes part of the account balance too.
Soooo , if you have a savings account , daily is better than monthly because more gets deposited into your account AND
If you have a loan or credit card , daily is bad because you pay more over time.

Variable means it could be 5% one day but maybe 4.75% the next - variable means changing , often based on the Federal prime bank rate.

Answer 2

Compounded Daily Definition