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  • CH 7 Model 1 Effect of Compunding Frequency

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    Finance

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    Ch 7 Model 1 Effect of Compunding Frequency

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    11 views1 page

    CH 7 Model 1 Effect of Compunding Frequency

    Uploaded by

    realit
    Finance

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as XLS, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 1

    Effect of Compounding Frequency

    Nominal annual interest rate (APR) Number of compounding periods per year Amount of initial investment Length of investment period (years) Effective interest rate Future value of investment (using formula) Future value of investment (using function) 8.00% 2 $100,000 10 8.16% $219,112 $219,112

    Compounding period Annual Semi-annual Quarterly Monthly Bi-weekly Weekly Daily

    1 2 4 12 26 52 365

    Effective Int. rate 8.16% 8.00% 8.16% 8.24% 8.30% 8.32% 8.32% 8.33%

    Future Value $219,112 $215,892 $219,112 $220,804 $221,964 $222,281 $222,417 $222,535

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