ECONOMICS
COMPOUND INTEREST
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
Nora borrowed an amount of P40 000 which she paid with an interest of P2, 000 at the end of 3 years. At what nominal rate compounded semi-annually was it invested?
|
|
1.63%
|
|
|
0.016%
|
|
|
1.64%
|
|
|
0.0163%
|
Explanation:
Detailed explanation-1: -So 14.06% compounded quarterly has an effective rate of 15%. 2. You can make a one-year investment at 7.8% compounded monthly, or 8% compounded semi-annually.
Detailed explanation-2: -At what nominal rate compounded semi-annually will P10, 000 accumulate to P15, 000 in 10 years? Solution. Hence, the nominal rate is 4.10%.
Detailed explanation-3: -In this question, the nominal interest rate is 16%, with quarterly compounding, interest compounds 4 times a year. Applying the formula, the effective annual rate is: (1+16%/4)4−1=16.99%
Detailed explanation-4: -AI Recommended Answer: equivalent to 14% compounded quarterly is 14.14%.
There is 1 question to complete.