Find i if an amount is invested at 6.00% compounded every 3 months.
A) 3.00%
B) 2.00%
C) 6.00%
D) 1.50%
E) 0.02

Question

Quizplus · Accepted Answer

The interest rate needs to be converted to a quarterly basis (since it is compounded every 3 months). To do this, we can use the formula (1 + r/n)^n - 1, where r is the annual interest rate and n is the number of times compounded per year. Plugging in r = 6% and n = 4 (since there are 4 quarters in a year), we get an effective quarterly interest rate of approximately 1.50%. Therefore, the answer is D.

Find I If an Amount Is Invested at 6