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

Question

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

BlackTom AI · Accepted Answer

The problem asks for the total number of compounding periods over a given time span.
First, identify the compounding frequency: semi-annual means two compounding periods per year (m = 2).
Next, convert the time horizon into years, which is 7 years in this case.
To find the total number of periods, multiply the number of years by the compounding frequency per year: n = t × m = 7 × 2.
Carrying out the multiplication gives n = 14 periods in total.
This aligns with the idea that each year contributes two half-year periods to the total, doubling the count relative to annual compounding.

BFIN011 Week 1: Practice Quiz

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

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