Interest is compounded quarterly, and single payment cash flows (that is, F and P) are separated by 5 years What must the compounding period be on the interest rate, if the value of n in the P F or F P equation is (a) n 5, (b) n 20, (c) n 60 ...

Since interest is compounded quarterl ...

Interest is compounded quarterly, and single payment cash flows (that is, F and P) are separated by

Question:

Interest is compounded quarterly, and single payment cash flows (that is, F and P) are separated by 5 years. What must the period be on the interest rate, if the value of n in the P/F or
F/P equation is
(a) n = 5,
(b) n = 20,
(c) n = 60?

Compounding
Compounding is the process in which an asset's earnings, from either capital gains or interest, are reinvested to generate additional earnings over time. This growth, calculated using exponential functions, occurs because the investment will...