Question

1. if interest is compounded quarterly, how many times a year is it compounded?

four
one
two
twelve

Explanation:

The term "quarterly" means occurring once every quarter of a year. Since there are 4 quarters in a year (because a year has 12 months and \( \frac{12}{3} = 4 \) quarters of 3 months each), interest compounded quarterly is compounded 4 times a year.

Answer:

A. four