If you were evaluating a investment over a 10-year period that paid 8% compounded semiannually:

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Quizplus · Accepted Answer

With semiannual compounding, the interest rate needs to be divided by two, as it is being compounded twice per year. However, the number of years needs to be multiplied by two, as the investment is earning interest twice per year for the duration of the investment. This would result in a higher future value than if the investment had annual compounding. Therefore, adjusting for the semiannual compounding is necessary for an accurate evaluation of the investment's performance.

If You Were Evaluating a Investment Over a 10-Year Period