f $3800 is invested in a savings account for which interest is compounded quarterly, and if the $3800 turns into $4300 in 2 years, what is the interest rate of the savings account?

Answer 1

P = Po(1+r)^n.

r = Quarterly % rate expressed as a decimal.

n = 4Comp./yr. * 2yrs = 8 Compounding periods.

P = 3800*(1+r)^8 = 4300,
(1+r)^8 = 4300/3800 = 1.132,
8*Log(1+r) = Log1.132,
Log(1+r) = Log1.132/8 = 0.00673,
1+r = 10^(0.00673),
r = 10^(0.00673) - 1 = 0.0156,
APR = 4 * 0.0156 = 0.0625 = 6.25%.

Answer 2

6.22