Question

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

Answer 1

Answer:

16 compounded periods

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