{"id":104912,"date":"2021-01-30T14:19:16","date_gmt":"2021-01-30T08:49:16","guid":{"rendered":"https:\/\/www.vskills.in\/certification\/tutorial\/?page_id=104912"},"modified":"2024-04-12T14:28:17","modified_gmt":"2024-04-12T08:58:17","slug":"multi-period-or-semi-annual-and-other-compounding","status":"publish","type":"page","link":"https:\/\/www.vskills.in\/certification\/tutorial\/multi-period-or-semi-annual-and-other-compounding\/","title":{"rendered":"Multi-period or Semi-annual and other compounding"},"content":{"rendered":"\n<p>Normally interest rate is expressed for a year. In case, com-pounding is done semi-annually or quarterly or monthly or weekly, interest rate &amp; compounding to be adjusted accordingly to alter the number of time periods. The formula FV<sub>n<\/sub> = (1+r)<sup>n<\/sup> will get altered as below:<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" src=\"http:\/\/www.vskills.in\/lms\/wp-content\/uploads\/2016\/06\/Image-26-6.jpg\" alt=\"Image 26\" class=\"wp-image-39874\"\/><\/figure><\/div>\n\n\n\n<p>Where m is the number of compounding per year<\/p>\n\n\n\n<p>The interest rate specified on annual basis is known as the Nominal Interest Rate. If compounding done in a year is more than once, the actual rate of interest is called the<\/p>\n\n\n\n<p>Effective Interest Rate (EIR) \/Annual Percentage Rate (APR), which can be ascertained as below:<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" src=\"http:\/\/www.vskills.in\/lms\/wp-content\/uploads\/2016\/06\/Image-27-5.jpg\" alt=\"Image 27\" class=\"wp-image-39875\"\/><\/figure><\/div>\n\n\n\n<p>Similar to Future Value, Present Value of cash flows more than once a year can be discounted with the following formula:<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" src=\"http:\/\/www.vskills.in\/lms\/wp-content\/uploads\/2016\/06\/Image-28-6.jpg\" alt=\"Image 28\" class=\"wp-image-39876\"\/><\/figure><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Normally interest rate is expressed for a year. In case, com-pounding is done semi-annually or quarterly or monthly or weekly, interest rate &amp; compounding to be adjusted accordingly to alter the number of time periods. The formula FVn = (1+r)n will get altered as below: Where m is the number of compounding per year The&#8230;<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-104912","page","type-page","status-publish","hentry"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v24.5 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Multi-period or Semi-annual and other compounding - Tutorial<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.vskills.in\/certification\/tutorial\/multi-period-or-semi-annual-and-other-compounding\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Multi-period or Semi-annual and other compounding - Tutorial\" \/>\n<meta property=\"og:description\" content=\"Normally interest rate is expressed for a year. 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