SOLUTION: If $3,800 is invested in a savings account for which interest is compounded quarterly, and if the $3,800 turns into $4,300 in 2 years, what is the interest rate of the savings acco

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Question 623632: If $3,800 is invested in a savings account for which interest is compounded quarterly, and if the $3,800 turns into $4,300 in 2 years, what is the interest rate of the savings account?

Answer by ewatrrr(24785) About Me  (Show Source):
You can put this solution on YOUR website!
 

Hi,  

 In General A+=+P%281%2Br%2Fn%29%5E%28nt%29

A = Accumulated Amount $4,300

P= principal = $3,800

r= annual rate = .

n= periods per year = 4

t= years = 2

A+=+P%281%2Br%2Fn%29%5E%28nt%29

4300%2F3800+=+%281%2Br%2F4%29%5E%284%2A2%29

 log(43/38) =8 log(1 + r/4)

      .0067 = log(1 + r/4)

    10^(.0067) = 1 + r/4    | Solve for r