Question

What is the effective annual interest rate of an investment that pays 5.2% annual interest, compounded quarterly?

Answer 1

\[\rightarrow (1+\frac{.052}{4})^{4} -1\]
in general
\[r = (1+\frac{i}{n})^{n} -1\]

Answer 2

Oh wow... ok so where i get confused is plugging in the numbers correctly

Answer 3

hold on a sec let me try to work it out and see here

Answer 4

just use the general formula as a reference

Answer 5

so first I will divide .052/4 right? then by 4 correct??? this is where I get totally lost...thanks by the way for helping me Im really having a hard time with these problems

Answer 6

ok
divide .052 by 4
add 1
raise to 4th power
subtract 1

:)

Answer 7

so its (1.013)(4) -1???

Answer 8

3.052?

Answer 9

that cannot be right lol

Answer 10

no 4th power not multiply by 4

Answer 11

oh crap hang on lol

Answer 12

UGHHHHH what am I doing wrong I keep getting the same stupid answer I know not to the 4th power got that but not getting any of the answers supplied ughhh

Answer 13

(1.013) ok so then its 1.013 4 times?? why am I confusing myself I have been doing this crap since 3 this afternoon lol

Answer 14

not multiply though

Answer 15

OH no its 5.30% is that right??

Answer 16

(1.013)^4 = 1.053

yes you got it now :)

Answer 17

woohoo awesome!!! Can you help me with anymore or do you have time?

Answer 18

sure

Answer 19

OH THANK YOU!!!!! ;) Ok so this is another..... $4200 is invested for 3 months at an annual simple interest rate of 13%. How much interest will be earned?

Answer 20

so I got P= 4200 R= .013

Answer 21

T=3?

Answer 22

oh simple interest is easy
\[I = P*r*t\]

Answer 23

"t" is always in years...we want 3 months what fraction of a year is that ?

Answer 24

3/365??? that maybe wrong?

Answer 25

haha no 3/12 = 1/4

Answer 26

12 months not 365 days

Answer 27

LOL I feel so dumb haha!!!! I was thinking 365 days in a year lol

Answer 28

so then do I change 1/4 into decimal?

Answer 29

if you want doesnt matter

Answer 30

oh ok just sec then

Answer 31

So I get 13.65 but thats not one of my answers

Answer 32

what did I do wrong should be right?

Answer 33

OH no 136.50 is it

Answer 34

i think it should be 136.50
rate = 13% = 0.13

Answer 35

your decimal point was off :)

Answer 36

woohooo!!! yeah whoops lol

Answer 37

Have a couple more you have time dont want to bug you

Answer 38

i got 10 min

Answer 39

Calculate the compound amount using the compound amount formula when P= 1,600, r=8% compounded semiannually, and t=14 years. Round to the nearest cent. OK I WILL try to hurry

Answer 40

P=1600 R=.08 T=14 so is it just multiplying?

Answer 41

OH wait it says semiannually ok so thats not just all hu

Answer 42

You there? :)

Answer 43

semi-annual means compounded 2 times a year...n=2
use the general formula
\[P(1+\frac{r}{n})^{nt}\]

Answer 44

OH CRAP

Answer 45

whats n again?

Answer 46

2? semiannualy right??? no I dont know????

Answer 47

oh I see where you put that hold on

Answer 48

so far I have 1600(1.04)28th power right??

Answer 49

correct, just plug that into calculator
gotta go

Answer 50

crap not getting it 1.04 28th i dont times it right what do i do?

Answer 51

1.04^28

Answer 52

its an exponent

Answer 53

k thanks for all your help alot!!!!

Answer 54

yw, have a good night

Answer 55

u still there by chance sorry...is it 4,699.51 just to make sure :)