Naomi deposited money into a savings account that is compounded quarterly at an interest rate of 6%. She thinks this quarterly r

Question

3 years ago

6

Naomi deposited money into a savings account that is compounded quarterly at an interest rate of 6%. She thinks this quarterly r

ate is the same as a monthly interest rate of 1.25%. Is Naomi right? If so, explain why and show how you got your answer. Is Naomi incorrect? If so, explain the mistake in her reasoning, give the correct monthly interest rate, and show how you got your answer. Please help me!! It’s due today!! I’ll make you brainliest.

Mathematics

2 answers:

N76 [4] · Answer 1 · 2022-07-12T22:57:04+03:00

N76 [4]3 years ago

4 0

Answer:

She is not right.

Step-by-step explanation:

There are 3 months in a quarter so we divide the 6% by 3 to get the monthly value.

A quarter = 3 months so 6% quarterly = 6/3 = 2 % monthly.

Schach [20] · Answer 2 · 2022-07-12T23:59:16+03:00

Answer: Naomi is not right and the monthly interest rate that gives her the interest as 6% is 5.97%

Step-by-step explanation:

The formula to calculate the future value of compound interest is

A=p (1+r÷n)^tn

A future value?

P present value assume 100

R interest rate

N frequency of time like quarterly. .

T time assume 1 year

Let's try the interest of 6% quarterly (4)

A=100×(1+0.06÷4)^(1×4)=106.136

Now try the interest of 5.97% monthly (12)

A=100×(1+0.0597÷12)^(1×12)=106.136

Which gives her the same result as 6% quarterly interest rate.

Hope it helps!