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%

Time = 20 x 4 = 80 periods

Interest Rate = 8%/4 = 2%

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

Quote:

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Originally Posted by rainblo83

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%

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The answer is "D"

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