SOLUTION: Principal: $16,000 Interest rate: 24% Compounded quarterly Calculate the effective rate (APY) of interest for 1 year. (Use the Table provided.) (Do not round intermediate

Algebra ->  Finance -> SOLUTION: Principal: $16,000 Interest rate: 24% Compounded quarterly Calculate the effective rate (APY) of interest for 1 year. (Use the Table provided.) (Do not round intermediate       Log On


   

Question 1150075: Principal: $16,000
Interest rate: 24%
Compounded quarterly
Calculate the effective rate (APY) of interest for 1 year. (Use the Table provided.) (Do not round intermediate calculations. Round your final answer to the nearest hundredth percent.)
Effective rate %
Answer by greenestamps(13200) About Me  (Show Source):
You can put this solution on YOUR website!


We don't have "the table provided"....

The (annual) interest rate is 24%; compounded quarterly means 24/4 = 6%, compounded 4 times.

The growth factor is

%281%2B%280.24%2F4%29%29%5E4 = 1.262477 to 6 decimal places

The APY is 1.262477-1, converted to a percent.

To 2 decimal places, that is 26.25%