Final answer:
To determine the compound interest rate needed to find the future value of an investment at 4.4% annual interest for two years compounded quarterly, we can use the formula: Future Value = Principal x (1 + interest rate/n)^(number of periods). Let's solve for the interest rate.
Step-by-step explanation:
Compound interest is an interest rate calculation on the principal plus the accumulated interest.
To determine the compound interest rate needed to find the future value of an investment at 4.4% annual interest for two years compounded quarterly, we can use the formula:
Future Value = Principal x (1 + interest rate/n)^(number of periods),
where n is the number of times interest is compounded per year. In this case, the interest is compounded quarterly, so n = 4.
Let's solve for the interest rate:
- Start with the future value: Future Value = Principal x (1 + interest rate/4)^(2*4).
- Substitute the given values: Future Value = Principal x (1 + 0.044/4)^(2*4).
- Solve the equation to find the value of the interest rate.
The primary topic of this question is compound interest.