Lesson 4: Compound Interest compounded more than once a year

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10 Terms

1
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Frequency of Conversion (m)

number of conversion period in one year. Annually, Semi-annually, Quarterly, Monthly, Daily

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Annually

1

3
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Semi-annually

2

4
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Quarterly 

4

5
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Monthly

12

6
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Daily

365

7
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Conversion or Interest Period(t)

time between successive conversion of interest

8
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Total number of conversion periods(n)

n=mt (frequency of conversion)x (time in years)

9
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Nominal Rate ( r )

annual rate interest

10
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Rate(i)

rate of interest for each conversion period. i=r/m