Answer: 2.5%
Step-by-step explanation:
Hi, to answer this question we have to apply the compounded interest formula:
A = P (1 + r/n) nt
Where:
A = Future value of investment (principal + interest)
P = Principal Amount
r = Nominal Interest Rate (decimal form, 10/100= 0.1)
n= number of compounding periods in each year (365)
Replacing with the values given
A=250(1+0.1/1)^t/1
A=250(1.1)^t
For a interest compounded annually, n=1, compounded quarterly n= 4 (4quarters in a year )
Interest rate 0.1 /4 = 0.025= 2.5%
