When you turned 20,you deposited $1,500 into an account paying interest that is compounded quarterly.You just turned 30,and there is now $2,233.30 in the account.What nominal annual interest rate is the account paying?
A) 1.00%
B) 4.00%
C) 4.06%
D) 16.24%
E) 3.75%

Question

Quizplus · Accepted Answer

i = 11ea7fdb_fc25_75cb_a768_79b4dd8016d1_TB2902_00 - 1
i = 11ea7fdb_fc25_75cc_a768_2f5e7285d74a_TB2902_00 - 1 = 4.06% (effective)
Effective interest rate = 11ea7fdb_fc25_75cd_a768_17ff4af21ac7_TB2902_00 - 1
.046 = 11ea7fdb_fc25_9cde_a768_9929716e7b1e_TB2902_00 - 1
1.046 = 11ea7fdb_fc25_9cdf_a768_6198fc7c0b86_TB2902_00 1.0099 = 11ea7fdb_fc25_9ce0_a768_b164ab46e0f9_TB2902_00 .0099 = 11ea7fdb_fc25_9ce1_a768_f55c686deeea_TB2902_00 i = 4%
Using a financial calculator:
N = 40, PV = -1,500, PMT = 0, FV = 2,233.30, cpt I/Y = 1 1 × 4 = 4.00%

When You Turned 20,you Deposited $1,500 into an Account Paying