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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