Time value

Sudha Reddy

A = 16000 Period = 18m rate 10% p.a payable half yearly so n =18m/6m= 3 and r = 10/2=5%

Thread Starter

In 18months compounding is made 3 times so rare should be also 10/3

CA Suraj Lakhotia Admin

Rate given is per annum (per year). Not for 18 months.

Thread Starter

Sir for 12 months rate is 10 percent. Since the question says half yearly it is 5 percent But there are additional 6 months what about it

Sudha Reddy

that should be adjusted in no. of terms not rate of interest

Thread Starter

Ok mam. But when I write in the t equal to 3/2 and multiply with 2 AM I compounding only 2 times

CA Suraj Lakhotia Admin

3/2 x 2 =3

Thread Starter

If we multiply with 2 we are actually compounding 2 times in one year but I think additional 6 months are left

Thread Starter

Thank you sir for being patient and taking extra timr