January 2018
Beginner
976 pages
142h 14m
English
book
Principles of Managerial Finance, 15th Edition
by Scott B. Smart, Chad J. Zutter, Lawrence J. Gitman
Content preview from Principles of Managerial Finance, 15th Edition
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5.5 Compounding Interest More Frequently Than Annually
LG5
Interest often compounds more frequently than once a year. Savings institutions compound interest semiannually, quarterly, monthly, weekly, daily, or even continuously. This section discusses various issues and techniques related to these more frequent compounding intervals.
Semiannual Compounding
Semiannual compounding of interest involves an investment with two compounding periods within the year. Rather than paying the stated interest rate once a year, the investment pays one-half of the stated interest rate twice a year.
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