• 3. Compounding Frequency and Effective Annual Rate

    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.

2. Future Values4. Future Values with Multiple Cash Flows