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an investment of $75000 increases of a rate of 12.5% per year quarterly compound what would it be in 30 years?

 Feb 6, 2015

Best Answer 

 #2
avatar+118723 
+5

Almost anon but not quite.

It is 12.55% per year compounded quarterly for 30 years.

that is 0.1255 per year compounded quarterly for 30 years.

BUT the real rate is 0.1255/4=0.031375 per quarter invested for 30*4=120 quarters

 

FV= 75000(1+0.1255)^120

 Feb 7, 2015
 #1
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0

75000 x 1.125 to the power of 30

 Feb 6, 2015
 #2
avatar+118723 
+5
Best Answer

Almost anon but not quite.

It is 12.55% per year compounded quarterly for 30 years.

that is 0.1255 per year compounded quarterly for 30 years.

BUT the real rate is 0.1255/4=0.031375 per quarter invested for 30*4=120 quarters

 

FV= 75000(1+0.1255)^120

Melody Feb 7, 2015

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