Hello, In the continous compounding problem where the 8% was compounded continuously for a year, the compounding period was stated as 365 days and this value (365) was not multiplied by the interest rate (8%). However in another example where 1.6% was compounded monthly, the compounding period was given as 12 (clearly understood) however the interest rate was adjusted to 19.2 annually (product of m and i). this is not clearly understood. Also, as a follow up to this question, what if the interest rate of 1.6% was compounded quarterly , the compounding period "m" , will thus be 4 (correct?) if so, will the interest rate also be adjusted to the product of "m" and "i"? Thanks
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Hello,
In the continous compounding problem where the 8% was compounded continuously for a year, the compounding period was stated as 365 days and this value (365) was not multiplied by the interest rate (8%). However in another example where 1.6% was compounded monthly, the compounding period was given as 12 (clearly understood) however the interest rate was adjusted to 19.2 annually (product of m and i). this is not clearly understood.
Also, as a follow up to this question, what if the interest rate of 1.6% was compounded quarterly , the compounding period "m" , will thus be 4 (correct?) if so, will the interest rate also be adjusted to the product of "m" and "i"?
Thanks
can you show how to interpolate as well? would be great help!