document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1173740>Question 1173740</A>: <I><SPAN STYLE=\"word-break: break-all;\"> Investment earns 8.25% annually. Explain how you would calculate i and n when the interest is compounded:                                                                            \r<BR>\n" );
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document.write( "a) semi-annually for 6 years\r<BR>\n" );
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document.write( "b) daily for 3 years </SPAN>\n" );
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document.write( "a) 8.25% annual, compounded semi-annually:<br><BR>\n" );
document.write( "You want the periodic interest rate i, when applies 2 times a year, to give an annual interest rate of 8.25%, or 0.0825:<br><BR>\n" );
document.write( "<IMG STYLE=\"max-width:80%;\" SRC=/cgi-bin/plot-formula.mpl?expression=%281%2Br%2F2%29%5E2+=+1.0825 ALIGN=MIDDLE  ALT=\"%281%2Br%2F2%29%5E2+=+1.0825\"   DISABLED_style= \"max-width:90%; height:auto;\" ><br><BR>\n" );
document.write( "<IMG STYLE=\"max-width:80%;\" SRC=/cgi-bin/plot-formula.mpl?expression=1%2Br%2F2%29+=+1.0825%5E%281%2F2%29 ALIGN=MIDDLE  ALT=\"1%2Br%2F2%29+=+1.0825%5E%281%2F2%29\"   DISABLED_style= \"max-width:90%; height:auto;\" ><BR>\n" );
document.write( "<IMG STYLE=\"max-width:80%;\" SRC=/cgi-bin/plot-formula.mpl?expression=i+=+r%2F2+=+1.0825%5E%281%2F2%29-1 ALIGN=MIDDLE  ALT=\"i+=+r%2F2+=+1.0825%5E%281%2F2%29-1\"   DISABLED_style= \"max-width:90%; height:auto;\" ><br><BR>\n" );
document.write( "Use a calculator....<br><BR>\n" );
document.write( "n is the number of compounding periods. 6 years, 2 times a year, so n=6*2=12.<br><BR>\n" );
document.write( "b) 8.25% annual, compounded daily:<br><BR>\n" );
document.write( "Same calculations as above, with a different number of compounding periods per year.<br><BR>\n" );
document.write( "The exact answers depend on whether you use 365 days in a year or, as is often done, the rounded number of 360.<br><BR>\n" );
document.write( "Since I don't know which you want to use, and since the calculations are exactly the same as for the first case, I leave the calculations to you.<br><BR>\n" );
document.write( " </SPAN>\n" );
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