Question

$12000 into an investment account for 5 years. The investment earns 6% interest per

annum, compounding quarterly.

What is the interest rate per quarter?

Answer 1

We may use the logarithm formula,

N = ln(EV/SV) ÷ ln(1+r), where (1+ r) is the value of 1 plus interest for 1 year.

EV is end value, SV is start value.

EV is 20000, SV is 12000, interest is 5.6% semi annual

(1+r) is obtained as,

Explanation: