PDA

View Full Version : Very confused


rainblo83
Mar 22, 2007, 05:41 PM
I need help working out this question. Does anybody know the answer?

To compound $100. Quarterly for 20 years at 8% we must use:
a. 40 periods at 4%
b. 5 periods at 12%
c. 10 periods at 4%
d. 80 periods at 2%

CaptainForest
Mar 22, 2007, 08:29 PM
Time = 20 x 4 = 80 periods

Interest Rate = 8%/4 = 2%

Therefore, Answer is: d. 80 periods at 2%

Carol White
Mar 24, 2007, 11:55 AM
I need help working out this question. Does anybody know the answer?

To compound $100. quarterly for 20 years at 8% we must use:
a. 40 periods at 4%
b. 5 periods at 12%
c. 10 periods at 4%
d. 80 periods at 2%
The answer is "D"

20 years quarterly = 80
8% also will be divided by the quarterly periods as well = 2%