Question

For a sum of money invested at 3.3% compounded monthly for 10 years state the following values. (a) the number of compounding periods (b) the periodic rate of interest (c) the compounding factor (1 i)" (d) the numerical value of the compounding factor (a) The number of compounding periods is (Type an integer or a decimal.) (b) The periodic rate of interest is (Round to six decimal places as needed.) (c) The compounding factor is 1+ (Type integers or decimals.) (d) The numerical value of the compounding factor is. (Round to six decimal places as needed.)

Answer 1

a) The number of compounding period =10*12 =120
b) Periodic rate =3.3%/12 =0.275000%
c) The compounding factor =(1+r)^n =(1+0.275%)^120
d)Numerical value of compounding factor =1.390338