The People’s Blog

April 20, 2009

What are some situations when interest would compound?

Filed under: Other - Business & Finance — admin @ 9:06 pm
Answerer asked:


Negotiation only? Someone explain

2 Comments »

  1. The easiest example to explain is the purchase of 0 coupon bonds. You buy these bonds on a specified compound interest rate. The bonds are sold at a discount to face value and when they mature, you receive face value. The quoted interest rate is the annual compounded rate for the bonds.

    Another example is the famous U S savings bonds. You buy these also at a specified compound rate.

    Comment by muncie birder — April 22, 2009 @ 4:08 am


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