V
verma.kunal13
Member
Hello!
I am very confused with the convertibility and for two days have been researching as much as possible, but it has led me nowhere. Why in some questions rate of interest is convertible into effective rate of interest simply as i^m/m as in question 7.16 part(iii), but in others they use 1+i= (1+i^p/p)^p. How do I get to know which one to use? In question 7.2, rate of interest 6.2% pa is convertible half yearly (now, I got the answer for this as someone explained it for me). But what went wrong with question 7.16 part(iii). after convertibility, why is it divided by 1/4? I was simply applying (1+i)^n -1/d^p. please explain the convertibility and question 7.16(iii).
Now, I come to the solution of question 7.16(iv), in alternative solution, how is rate of interest convertible to 2.01% and why is it converted when it was not required(as I think so)?
Thank you so much friends for your time.
help me ASAP!
warm Regards,
Kunal Verma,
verma.kunal13@gmail.com
I am very confused with the convertibility and for two days have been researching as much as possible, but it has led me nowhere. Why in some questions rate of interest is convertible into effective rate of interest simply as i^m/m as in question 7.16 part(iii), but in others they use 1+i= (1+i^p/p)^p. How do I get to know which one to use? In question 7.2, rate of interest 6.2% pa is convertible half yearly (now, I got the answer for this as someone explained it for me). But what went wrong with question 7.16 part(iii). after convertibility, why is it divided by 1/4? I was simply applying (1+i)^n -1/d^p. please explain the convertibility and question 7.16(iii).
Now, I come to the solution of question 7.16(iv), in alternative solution, how is rate of interest convertible to 2.01% and why is it converted when it was not required(as I think so)?
Thank you so much friends for your time.
help me ASAP!
warm Regards,
Kunal Verma,
verma.kunal13@gmail.com
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