Which conversion method retains the original monthly payment amount when switching to semi-monthly payments?

When converting a monthly payment to a semi-monthly payment, the correct method is to divide the monthly payment by 2. This is because there are two semi-monthly periods in each month. By dividing the monthly payment by 2, you maintain the original total payment amount over the course of the month, but distribute it over the two payment periods.

Therefore, if you initially have a monthly payment of, for example, $1,000, the semi-monthly payment would be calculated as $1,000 divided by 2, resulting in a payment of $500 every half month. This ensures that the total amount paid over the month remains consistent with the original monthly payment, as you're simply splitting it into two payments rather than altering the total sum.

The other methods, such as multiplying the monthly payment by 2 or 12, or dividing by 4, would change the total payment amount and do not accurately reflect how payments should be structured when moving to a semi-monthly format. The semimonthly payment method aims to keep the financial commitment consistent while changing the frequency of the payment schedule.