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#1 2010-07-04 03:03:55

atut
Member
Registered: 2008-04-23
Posts: 30

Intrests

$49,700 at 9.6% compoundeed quarterly for 3 1/4 years

Can someone please show my how to work it out in the eaisiest, simplest method.

Thanks:)

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#2 2010-07-04 05:36:07

ZHero
Real Member
Registered: 2008-06-08
Posts: 1,889

Re: Intrests

Interest = 49700[(1 + 0.096)[sup]13[/sup] - 1]

Last edited by ZHero (2010-07-04 05:37:53)


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#3 2010-07-04 07:14:39

bobbym
bumpkin
From: Bumpkinland
Registered: 2009-04-12
Posts: 109,606

Re: Intrests

Hi atut;

I am getting:

Probably should be:

I = 49700 ( 1.024)^13 = 67648.13

I used this interest calculator here.

http://www.mathsisfun.com/money/compoun … lator.html

Best I can remember is that when interest is compounded quarterly you have to divide it by four. You don't take 9.6% four times per year but rather 2.4% every 3 months.

I am just seeing soroban posting below this, he agrees with this.


In mathematics, you don't understand things. You just get used to them.
If it ain't broke, fix it until it is.
Always satisfy the Prime Directive of getting the right answer above all else.

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#4 2010-07-04 07:18:30

soroban
Member
Registered: 2007-03-09
Posts: 452

Re: Intrests

. .




.

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#5 2010-07-04 16:47:58

ZHero
Real Member
Registered: 2008-06-08
Posts: 1,889

Re: Intrests

Hi atut!
The question should mention that "9.6% per annum compounded quarterly" for that too work.
Anyways, I think that 9.6% interest quarterly is equivalent to 38.4% per annum which is too much hence take it to be 9.6% per annum!


If two or more thoughts intersect, there has to be a point!

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#6 2010-07-04 18:05:24

soroban
Member
Registered: 2007-03-09
Posts: 452

Re: Intrests

.


. .



. .


.

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#7 2010-07-05 05:20:54

ZHero
Real Member
Registered: 2008-06-08
Posts: 1,889

Re: Intrests

You're RIGHT Soroban about the Convention!! smile


If two or more thoughts intersect, there has to be a point!

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#8 2010-07-07 20:30:12

Bob
Administrator
Registered: 2010-06-20
Posts: 10,627

Re: Intrests

If an interest rate is 9.6 per annum that's equivalent to multiplying the principal by 1.096.

To find what this is as a quarterly rate find the fourth root of !.096 = 1.023181....

which is an interest rate of 2.3181%.

That's how credit card amd loan companies work.


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