Macgre: You have a $5,000 certificate of deposit that earns 9.2% a year. The interest is compounded quarterly. How much interest will be earned on the certificate during the fourth quarter?
Thanks for any help!
This is a tricky one.
If the rate of interest is 9.2% per year, what is the rate of interest for a quarter of a year? This is the interest rate that you will use.
You actually need to work out what the total will be after 1 quarter, then
You actually need to work out what the total will be after 2 quarter, then
You actually need to work out what the total will be after 3 quarter, then
You actually need to work out what the total will be after 4 quarter, then
Then your interest for the last quarter will be the total after 4 quarters - the total after 3 quarters.
Can you do it now ? If not post again, but tell me what you have done yourself.
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