Engineering Board Exam Reviewer · Compound Interest · medium
At what nominal rate compounded quarterly will P40,000 grow to P70,000 in 6 years?
- 12.5%
- 9%
- 9.44%
- 10%
Answer
C. 9.44%
Solution
n=6(4)=24. 70,000=40,000(1+i)24 1+i=(1.75)1/24=1.02359, so i=2.359% per quarter. The nominal rate is 4(2.359%)=9.44%.
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