Use the present value and future value tables included in Appendix 8 and on the textbook companion website.
- For a 10-year bond paying semiannual interest, how many compounding periods are there over the life of the bond?

Question

Use the present value and future value tables included in Appendix 8 and on the textbook companion website. 
- For a 10-year bond paying semiannual interest, how many compounding periods are there over the life of the bond?

Quizplus · Accepted Answer

Since the bond pays semiannual interest, there are 2 compounding periods per year. Therefore, over the 10-year life of the bond, there will be 20 compounding periods (10 years x 2 compounding periods per year).

Use the Present Value and Future Value Tables Included in Appendix