NON-ANNUAL COMPOUNDING (FUTURE VALUE)

Question 1

stated annual interest rate
or quoted interest rate.

Answer 1

ather than quote
the periodic monthly interest rate, financial institutions often quote an annual interest
rate that we refer to the stated annual interest rate
or quoted interest rate (rs)

Question 2

With more than one compounding (CD) period per year, the future value formula can
be expressed as

Answer 2

FV N = PV ( 1 + rs/m )^mN