Asked by Nathan Papke on Jun 14, 2024
Verified
If a $15,000 investment grew to $21,805 in 4½ years of quarterly compounding, what effective rate of return was the investment earning?
Quarterly Compounding
The process of calculating interest and adding it to the principal sum of a loan or deposit on a quarterly basis.
Effective Rate
The interest rate on a loan or investment, adjusted for the effect of compounding over a given period.
- Acquire the ability to calculate and understand effective interest rates given varying compounding periods.
Verified Answer
PM
Learning Objectives
- Acquire the ability to calculate and understand effective interest rates given varying compounding periods.