a sum of $5000 is invested for 2 years with interest compounding quaterly.If he earns $495 in interest what interest rate was the money invested at?
+118723 a sum of $5000 is invested for 2 years with interest compounding quaterly.If he earns $495 in interest what interest rate was the money invested at?
\(5495=5000(1+r)^8\\ 5495\div 5000=(1+r)^8\\ 1.099=(1+r)^8\\ 1.099^{1/8}=1+r\\ 1.01186998=1+r\\ r=0.01186998\\ \mbox{r is the effective quarterly rate of interest.}\\ \mbox{The nominal annual rate is} \;\;\;4r \\ 4r= 4*0.01186998=0.04747992\\ \mbox{So the nominal annual rate is} \approx4.7\% \\ \)
+118723 a sum of $5000 is invested for 2 years with interest compounding quaterly.If he earns $495 in interest what interest rate was the money invested at?
\(5495=5000(1+r)^8\\ 5495\div 5000=(1+r)^8\\ 1.099=(1+r)^8\\ 1.099^{1/8}=1+r\\ 1.01186998=1+r\\ r=0.01186998\\ \mbox{r is the effective quarterly rate of interest.}\\ \mbox{The nominal annual rate is} \;\;\;4r \\ 4r= 4*0.01186998=0.04747992\\ \mbox{So the nominal annual rate is} \approx4.7\% \\ \)
