Question

The number of conversion periods in a year, if the interest on a principal is compounded every two months is in​

Answer 1

Answer:

The time period after which the interest is added each time to form a new principal is called the conversion period. When the interest is compounded half yearly, there are two conversion periods in a year each after 6 months.

Step-by-step explanation:

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Answer 2

GIVEN:

The interest on a principal is compounded every two months

TO FIND:

The number of conversion periods in a year

SOLUTION:

The lap of time in the middle of a series of conversions of interest is popularly known as the conversion period or interest period.

We have given in the question to find out the conversion period compounded every two months. So here we will consider the total duration of 12 months. If it was given in days then we would have considered the total duration as 365 days.

To find out the conversion period we will use formula

$=\frac{total duration}{given duration} \\=\frac{12}{2} \\=6$

Hence, the conversion period in the year will be 6