Shorter compounding period, Financial Accounting

Assignment Help:

In our discussion so far, we have supposed that the compounding is done yearly, here let us see the case where compounding is complete more often.  In such case the equation (1) is modified to factor into the change of compounding frequency.

FVn = PV (1 + K/M) m*n

Here    FVn   = Future value after n years

PV = Present Value

K     = nominal annual rate of interest

m    = Frequency of compounding complete during a year

n     = number of years for that compounding is done.

 Whether the interest is payable semiannually frequency of compounding is 2, if this is payable monthly frequency is 12, if it is payable weekly frequency is 52 and so on.


Related Discussions:- Shorter compounding period

Explain what happens if a swap is used ineffectively, The key criterion for...

The key criterion for qualifying as a hedge is that the hedging relationship must be highly effective in achieving offsetting changes in fair values or cash flows based on the hedg

Antitrust laws, Antitrust Laws - Assignment Help One of the foundations...

Antitrust Laws - Assignment Help One of the foundations of business within the United States is the freedom to compete in the marketplace; however, certain laws have been creat

Disclaimer of onerous property-bankruptcy, DISCLAIMER OF ONEROUS PROPERTY ...

DISCLAIMER OF ONEROUS PROPERTY 1) Effect of disclaimer The trustee may disclaim onerous property consisting of: Land burdened with onerous covenants; Stocks and shares;

What would be the money multiplier, The SIMPLEX financial system is charact...

The SIMPLEX financial system is characterized by a required reserves ratio of 11 percent; initial excess reserves are $1 million, and there are no currency or other leakages. a.

Calculation of internal rate of return, Q. Calculation of internal rate of ...

Q. Calculation of internal rate of return? The company is accurate in its belief that NPV measures the potential increase in company value of an investment project since theore

Course Project writing notes for a fictitious annual report, Do you anyone ...

Do you anyone on staff with the above experience? Notes cannot be copied from any real company''s financial report.

What are the u.s. tax consequences of this liquidation for w, 1. Finco is a...

1. Finco is a wholly owned Finnish manufacturing subsidiary of Winco, a domestic corporation that manufactures and markets residential window products throughout the world. Winco h

Illustrate individuals budget constraint, An individual is currently workin...

An individual is currently working 40 hours per week, earning $10 per hour.  He loses his job and successfully applies for unemployment insurance.  The insurance plan works as foll

How useful is accounting information, How useful is accounting information?...

How useful is accounting information? No one would seriously claim that accounting information fully meets all of the needs of every various user groups. Accounting is still a

Why convertibles might be an attractive source, Q. Why convertibles might b...

Q. Why convertibles might be an attractive source of finance for companies? - Convertibles is able to provide immediate finance at lower cost since the conversion option effect

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd