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Exercise

Calculating compounding frequencies

Different compounding frequencies can greatly affect how much your money will grow. In this exercise, we are going to compare three different savings accounts, each offering a different annual rate at a different compounding frequency, to see which one will grow your money the most.

In each example you will start with an initial investment of $10,000 that you invest for ten years. numpy_financial has already been imported for you as npf.

Instructions 1/4

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  • Calculate the future value of USD 10,000 invested in a savings account offering 5% annual interest paid once per year for 10 years and assign to account_1.