Question

fill in each blank so that the resulting statement is true. if compound interest is paid four times per year, the compounding period is _ month(s) and the interest is compounded _. if compound interest is paid four times per year, the compounding period is _ month(s) and the interest is compounded _.

Explanation:

Step1: Recall compound - period concept

The number of compounding periods per year determines the length of each compounding period.

Step2: Calculate the compounding period

Since there are 12 months in a year and compounding occurs 4 times a year, we divide the number of months in a year by the number of compounding periods per year. So, $12\div4 = 3$.

Answer:

3 months; quarterly