Question

$100,000 for 20 years compounded at 4 percent annually results in a rate per period of:

Answer 1

4%

Answer 2

how did you get this answer

Answer 3

It seems to me that the period is 1 year and the compounding is yearly too, so it's 4% per period.

Answer 4

Maybe this means something else, and I misunderstood.
The future value, F, of a present value, P, invested at i% for n compounding periods is:
F = P(1 + i)^n

In this case,
F = 20,000(1 + 0.04)^20
F = 20,000(1.04)^20
F = 20,000(2.19112)
F = 43,822.40
After having $20,000 at 4% per year compounded yearly, you end up with 43,822.40.
That means you gained $43,822.40 - $20,000 = $23,822.40 in interest in 20 years.
This means an average of $23,822.40/20 = $1191.12 per year. $1191.12 turns out to be 5.96% of $20,000. So it's an effective 5.95% simple interest rate per year.