OTHER COMPOUNDING INTERVALS o Let M=Number of compounding Intervals per Year and o Let r=the Interest rate for the Compounding Interval ◆ Then r= iM and o Nm=NxM,i.e, Nm is the total number of compounding intervals Example i=6%compounded monthly for 2 years Then,r=0.06/2=0.005 and nm=2x12=24 10/1599 Engineering economics 110/15/99 Engineering Economics 1 12 OTHER COMPOUNDING INTERVALS t Let M = Number of Compounding Intervals per Year and t Let r = the Interest Rate for the Compounding Interval t Then r = i/M and t Nm = N x M, i.e., Nm is the total number of compounding intervals Example i = 6% compounded monthly for 2 years Then, r = 0.06/12 = 0.005 and Nm = 2x12 = 24