Everything is good but i have one confusion That we have to divide the rate per annum when our compounding frequency is monthly, quarterly, semi annually
Yes, that part is annoying, and difficult to grasp at first. But keep in mind the negative exponent rule, where 1/x = x^-1. I have a video on that concept if you're interested
Everything is good but i have one confusion
That we have to divide the rate per annum when our compounding frequency is monthly, quarterly, semi annually
Rule of thumb is that the interest rate compounding period must match the payment frequency
Everything is clear, but if we are finding FV payments, why is the exponent a negative? That part is throwing me off. Am I interpreting it wrong?
Yes, that part is annoying, and difficult to grasp at first. But keep in mind the negative exponent rule, where 1/x = x^-1. I have a video on that concept if you're interested