how can we have a monthly compound interest 3,5% and 6 months later( semi-annually) and having again the semi-annual interest close to 3.5%. if we want to have an idea about the range where our i' will be located, we can sum up the monthly interest, so (3.5+3.5+3.5+3.5+3.5+3.5)= 21% so our interest should not be less than 21% after 6 months. how can you explain that?
If your interest is being compounded monthly for the first 6 months, you find how much your principal will mature to after 6 months. Then use this value as your new principle at 3.5% compounded semi-annually until your next maturity date. Does that help?
@@StudyForceOnline i have a question from my book, and it's tricky to solve maybe you can explain to me how to sovle it if you don't mind. $5000 per quarter for 6 years, 1% per month. I would like to know the effective rate for quarter
@@jeremienz3765 In this example, the cash flow isn't matching the compounding interest period, so we change the interest so that it is compounded quarterly instead of monthly. (1 + 0.01/12)^12 = (1 + i/4)^4 4[((1 + 0.01/12)^12)^(1/4) - 1] = i Therefore, i = 0.01000833565 Does that help?
Could you please help me with this one? Three banks X, Y and Z, each offers a different effective interest rate on its saving account. (Hint: Assume 1 year to be 366 days). Bank Nominal Interest Rate Compounding Period X 8.25% compounded daily Y 8.25% compounded Monthly Z 8.30% compounded Quarterly
@@StudyForceOnline thank u so much for answering and for being so kind. Oops I forgot to type the questions... A) for each 3 banks find effective semi-annual interest rate B) how much interest would you get after 3 years on a $5000 deposit made now? (Hint: use the interest calculated in A).
Thank you sir!
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Thank you so much❤❤❤❤
This was very helpful
how can we have a monthly compound interest 3,5% and 6 months later( semi-annually) and having again the semi-annual interest close to 3.5%. if we want to have an idea about the range where our i' will be located, we can sum up the monthly interest, so (3.5+3.5+3.5+3.5+3.5+3.5)= 21% so our interest should not be less than 21% after 6 months. how can you explain that?
If your interest is being compounded monthly for the first 6 months, you find how much your principal will mature to after 6 months. Then use this value as your new principle at 3.5% compounded semi-annually until your next maturity date. Does that help?
@@StudyForceOnline i have a question from my book, and it's tricky to solve maybe you can explain to me how to sovle it if you don't mind. $5000 per quarter for 6 years, 1% per month. I would like to know the effective rate for quarter
@@jeremienz3765 In this example, the cash flow isn't matching the compounding interest period, so we change the interest so that it is compounded quarterly instead of monthly.
(1 + 0.01/12)^12 = (1 + i/4)^4
4[((1 + 0.01/12)^12)^(1/4) - 1] = i
Therefore, i = 0.01000833565
Does that help?
@@StudyForceOnline yes, it does. Thank you
great video
Could you please help me with this one?
Three banks X, Y and Z, each offers a different effective interest rate on its saving account.
(Hint: Assume 1 year to be 366 days).
Bank Nominal Interest Rate Compounding Period
X 8.25% compounded daily
Y 8.25% compounded Monthly
Z 8.30% compounded Quarterly
@@eekanspok-oq8xm biology-forums.com/index.php?topic=2095687 Hope this helps
@@StudyForceOnline thank u so much for answering and for being so kind.
Oops I forgot to type the questions...
A) for each 3 banks find effective semi-annual interest rate
B) how much interest would you get after 3 years on a $5000 deposit made now? (Hint: use the interest calculated in A).
@@eekanspok-oq8xm Full solution can be found here. biology-forums.com/index.php?topic=2095687
@@StudyForceOnline you are awesome thank u so much
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