document.write( "Question 1076468: Why, in my finance class, when asked this question - You invest $1,000 for 3 years at 6% per annum compounding quarterly. What is the equivalent annual simple rate of interest? - am I told the answer is 6.521%, when my calculator shows 6.136%, when I preform (1195.62/1000)^(1*3)-1. Am I missing something when trying to work out interest? Any answers would be greatly appreciated. Thank you. \n" ); document.write( "

Algebra.Com's Answer #691088 by MathTherapy(10552) $\"\"$ $\"About$

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\n" ); document.write( "Why, in my finance class, when asked this question - You invest $1,000 for 3 years at 6% per annum compounding quarterly. What is the equivalent annual simple rate of interest? - am I told the answer is 6.521%, when my calculator shows 6.136%, when I preform (1195.62/1000)^(1*3)-1. Am I missing something when trying to work out interest? Any answers would be greatly appreciated. Thank you.
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The formula for future value, based on SIMPLE INTEREST is: A = P + PTR, where:
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document.write( " = Future Value (1,195.62, in this case)
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document.write( " = Principal (1,000, in this case)
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document.write( " = Time, in years (3, in this case)
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document.write( " = Annual interest RATE (Unknown, in this case)
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document.write( "Substitute these variables, solve for R, and see what you get! \n" );
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