SOLUTION: Jordan heard that she could triple her money in 27 years if she invested it in her friend's telecommunications business. What nominal interest rate compounded quarterly does the bu

Question 1133506: Jordan heard that she could triple her money in 27 years if she invested it in her friend's telecommunications business. What nominal interest rate compounded quarterly does the business offer?
Answer by ankor@dixie-net.com(22740) (Show Source): You can put this solution on YOUR website!
Jordan heard that she could triple her money in 27 years if she invested it in her friend's telecommunications business.
What nominal interest rate compounded quarterly does the business offer?
:
assume the initial amt is 1 and the resulting amt is 3
1(1+)^(27*4) = 3
;
(1+)^108 = 3
use natural logs
ln((1+)^108) = ln(3)
:
108*ln((1+)) = 1.0986
:
log(1+) =
:
log(1+) = .010172336
Find the antilog
1 + = 1.01022425
subtract 1 from both sides
= .01022425
r = 4 * .01022425
r = .0409 or 4.09 % is the interest rate
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