2.

Compound Interest:
❖Nominal and Effective Interest Rates

r : nominal interest rate

i : effective interest rate
 If the interest rate is 15% per year compounded biannually, calculate
the effective interest rate.

If the interest rate is 15% per year compounded quarterly, calculate the
effective interest rate

If the interest rate is 15% per year compounded monthly, calculate the
effective interest rate
If: r = 15% per year:
Compound Interest Factors:-
A : Equal Annual Payments
n : ‫عدد الدفعات‬
 𝑨
If n =∞ →→ 𝑷 =
𝒊

If n =∞ →→ 𝑨 = 𝑷 ∗ 𝒊
Solution:-
Solution:-
Thank You