Section outline

  • This section expands the computation of future values to investment proposals that make multiple interest payments per investment period, such as semi-annual, quarterly, or monthly payments. In the process, we get to know how to compute the effective annual interest rate (EAR) that allows us to compare investment proposals with different interest payment schemes. We also learn how to handle investment proposals that make continuous interest payments.

    • This section's reading assignment and review questions are listed below.

    • Reading: Compounding Frequency Book
      Students must
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    • Quiz: Compounding Frequency
      Students must
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      Receive a grade