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A loan requires that the 8% interest be compounded quarterly for 4 years. Find the number of compounding periods

User Allenski
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1 Answer

6 votes

Answer:

16 compounded periods

Step-by-step explanation:

Here ,the loan amount was not given , they asked to compute only the compounding period of the loan.,

The period of loan is 4 years

interest calculation mode is quarterly

= (12 months÷4 = 4 times in a year)
(12 months÷4 = 4 times in a year)

= 4 ×4 = 16 compounding periods
4 ×4 = 16 compounding periods

Hence the 8% interest bearing 4 years loan will compounded 16 times

User Layman
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