Assuming half yearly compounding frequency. How many periods ("n") are there in 1 years

Question

Assuming half yearly compounding frequency.  How many periods ("n") are there in 1 years

BlackTom AI · Accepted Answer

The question asks for the number of compounding periods, n, in 1 year with half-yearly (semiannual) compounding.
First, recall the relationship between time, compounding frequency, and periods: n equals the number of compounding intervals within the total time horizon.
With semiannual compounding, there are two compounding periods per year because the interest is applied twice within each 12-month year.
Therefore, over a span of 1 year, the count of periods accumulates as: 1 year × 2 periods per year = 2 periods total.
Since this is a short-answer format and no answer choices are provided, consider this the method to determine n for any given time in years when the compounding frequency is semiannual: multiply the number of years by 2.
If you were converting between variables, you could also use the general formula n = m × t, where m is the number of compounding periods per year and t is the number of years.
In this scenario, m = 2 and t = 1, so n = 2.
Be mindful that if the time horizon changed (for example, 3/4 of a year), you would get n = 2 × 0.75 = 1.5, which would need to be interpreted in context since partial periods may be treated differently depending on the convention used (some problems round to the nearest whole period, others account for partial periods).

BFIN011 Week 1: Practice Quiz

Assuming half yearly compounding frequency. How many periods ("n") are there in 1 years

View Explanation

Log in for full answers

Similar Questions

An investor makes a 7 year deposit of $53,859. The bank is paying an interest rate of 10.28% per year, compounding half yearly. Calculate "n" (number of periods).

Assuming monthly compounding frequency. How many periods ("n") are there in 19 years

Assuming monthly compounding frequency. How many periods ("n") are there in 22 years

Assuming semi annual compounding frequency. How many periods ("n") are there in 10 years

Bob is looking to borrow for 11 years. The bank advised Bob that the current compounding frequency is half-yearly Calculate the number of time periods (n) of this borrowing

Assuming monthly compounding frequency. How many periods ("n") are there in 17 years

Assuming semi annual compounding frequency. How many periods ("n") are there in 7 years

Assuming monthly compounding frequency. How many periods ("n") are there in 24 years

More Practical Tools for Students Powered by AI Study Helper

Homework AI Solver

Stylized AI Paper Writer

Plagiarism Checker Assistant

Citation AI Academic Writing Tool

In-Class Translation Assistant

AI Note Generator

AI Quiz Answers

Past Exam Questions from University Test Bank

Smart Practice Assistant

Adaptive Practice

Making Your Study Simpler