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FrozenT [24]
3 years ago
15

10. If you must calculate the present value of an amount at 12% compounded quarterly for 2 years, then the interest factor used

in the calculation is a. 3% for eight periods b. 12% for eight periods c. the interest factor for 12% for two periods divided by 4 d. None of these choices
Business
1 answer:
elixir [45]3 years ago
4 0

Answer:

Rate of interest will be 3 %

And number of periods will be 8

So option (a) will be correct option

Explanation:

We have given rate of interest = 12 %

And time period = 2 years

We have rate of interest is the money is compounded quarterly

When money is compounded then we divide the rate of interest by 4 and multiply time period by 4

So rate of interest for quarterly will be =\frac{12}{4}=3 %

And number of periods will be =2\times 4=8period

So option (a) will be the correct answer

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