COMPOUND INTEREST

[Saumyojit]

I want to know how did the amount compound half yearly & quarterly formula came ?
A = P (1 + (r/2)/100)^2n
n = time in years
r=rate of interest



A = P (1 + (r/4)/100)^4n
n = time
r=rate of interest.

 

[Saumyojit]

@Dr Peterson tell please

 

[HallsofIvy]

I am not Doctor Peterson but:
compounded "half yearly" means it is compounded every half year so the number of times it is compounded in "n" years is 2n. Also, if the interest rate is "r per year" then it is r/2 every half year.

Also
compounded "quarterly" means it is compounded every quarter year so the number of times it is compounded in "n" years is 4n. Also, if the interest rate is "r per year" then it is r/4 every quarter year.

 

[Steven G]

Didn't I already show you this already?

 

[HallsofIvy]

Sometimes it just doesn't stick!

 

[lookagain]

A = P(1 + (r/2)/100)^2n
n = time in years
r=rate of interest


A = P(1 + (r/4)/100)^4n
n = time
r=rate of interest.

Saumyojit, those exponents, in this case, need to be in grouping symbols:

A = P(1 + (r/2)/100)^(2n)


A = P(1 + (r/4)/100)^(4n)

 

[Saumyojit]

this has been solved. no comments further