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cmill511
Mar 19, 2006, 05:34 PM
If a firm pays 10% compounded semiannually, the true rate of interest is greater than 10%?

CaptainForest
Mar 19, 2006, 08:29 PM
if a firm pays 10% compounded semiannually, the true rate of interest is greater than 10%?

Yes


(1 + .10/2)^2 - 1 = .1025 = 10.25%

iceberg1002
Aug 1, 2010, 02:18 PM
The more frequently interest is compounded, the larger will be the final or terminal amount.

morgaine300
Aug 3, 2010, 01:12 AM
Please watch the dates on the posts. The search tends to drag up old stuff.