Intrests

atut · 2010-07-04 03:03:55

$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:)

ZHero · 2010-07-04 05:36:07

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

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

bobbym · 2010-07-04 07:14:39

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.

soroban · 2010-07-04 07:18:30

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ZHero · 2010-07-04 16:47:58

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!

soroban · 2010-07-04 18:05:24

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ZHero · 2010-07-05 05:20:54

You're RIGHT Soroban about the Convention!!

Bob · 2010-07-07 20:30:12

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.

Math Is Fun Forum

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

Intrests

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

Re: Intrests

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

Re: Intrests

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

Re: Intrests

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

Re: Intrests

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

Re: Intrests

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

Re: Intrests

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

Re: Intrests

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