8/3=(1+r/4)^80
1.01234=1+r/4
0.01234=r/4; r=0.04934 or 4.934%
A sales representative describes a "guaranteed investment fund" that if offered to new investors. By depositing $15,000 in the fund, you will be guaranteed to receive a total of at least $40,000 after 20 years. Assuming that interest is compounded quarterly, determine the fixed annual rates of interest that yield.
(a) the minimum that yield
(b) a return of $48,00 after 20 years
Formula :
A=P(1+r/n) ^nt
A=balance in account
P=Principal (original)
r=annula interest rate
n= # of compounds in a year
t=time in years
