LO 3 Patrick has $2000 to invest. Which of the following options should he choose?

4% compounded annually

3.75% compounded semi-annually

3.5% compounded quarterly

3.25% compounded monthly

Find the nominal annual rate of interest

at which $2500 will grow to $4000 in eight years compounded quarterly;

at which money will double in five years if compounded semi-annually;

if the effective annual rate of interest is 9.2% and compounding is done monthly;

that is equivalent to 8% compounded quarterly.


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