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A loan requires that the 4% interest be compounded monthly for five years find the number of compounding periods

Sagot :

altavistard

Answer:

60 compounding periods

Step-by-step explanation:

The proper formula for compound interest is A = P(1 + r/n)^(nt), where r is the interest rate as a decimal fraction, n is the number of times that interest is compounded in 1 year, and t is the number of years.

In this problem, we don't need to calculate the Amount, but only the number of compounding periods.  That is nt, which here is 12*5, or 60.

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