Question

When calculating a loan’s effective rate, if the interest compounds every two months, what value of n do you plug into your equation?

Answer 1

When calculating a loan’s effective rate, if the interest compounds every two months, what value of n do you plug into your equation
6

Answer 2

If the interest is comounded every 2 months then you will apply the interest 6 times in a year. So the value of n that you will plug into your equation is 6 because there 12 months a year then it wll be compounded every 2 months