The Compounding Period field controls how often interest is compounded. Compounding usually occurs at the same frequency that payments are made. It may also occur more frequently than payments, such as with daily compounding and monthly payments.
Compounding cannot occur less frequently than payments. Monthly payments, for example, cannot be combined with an annual compound period. One exception to this statement is with Canadian amortization where payments may often occur more frequently than compounding.
The Compounding Period field will be renamed Computation Interval automatically when U.S. Rule (simple interest – no compounding) or Canadian is selected as the Compute Method. The Computation Interval determines the frequency at which interest is calculated.
Learn about Compounding Periods.
Note: Throughout most of the Help documentation, Compounding Period / Computation Interval is referred to simply as compound period.
To choose a compound period
- Click in the Compounding Period / Computation Interval field to display a drop-down list of compound periods / computation intervals.
The period / interval currently in effect will be highlighted. - Click on a period / interval or press the first character of your choice. You don't have to display the drop-down list to select a choice by its first character. Press the character more than once to display choices.
To change the default compound period
- To change the default compound period that appears when you begin new schedules, choose Options from the File tab's menu.
- Click the Cash Flow button from the menu on the left of the TValue Options dialog.
- Select a new compound period from the drop-down list in the Default compound period field.
- Click OK to close the dialog.