Using compound interest, the rates per compounding period are given as follows:
a) 0.1273 = 12.73%.
b) 0.0833 = 8.33%
c) 0.0617 = 6.17%
The amount of money earned, in compound interest, after t years, is given by:
[tex]A(t) = P\left(1 + \frac{r}{n}\right)^{nt}[/tex]
In which:
The interest rate per compounding period is given as follows:
[tex]\left(1 + \frac{r}{n}\right)^n - 1[/tex]
For item a, the parameters are:
r = 0.12, n = 52.
Hence:
[tex]\left(1 + \frac{0.12}{52}\right)^{52} - 1 = 0.1273[/tex]
For item b, the parameters are:
r = 0.08, n = 104.
Hence:
[tex]\left(1 + \frac{0.08}{104}\right)^{104} - 1 = 0.0833[/tex]
For item c, the parameters are:
r = 0.06, n = 12.
Hence:
[tex]\left(1 + \frac{0.06}{12}\right)^{12} - 1 = 0.0617[/tex]
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