Question

A $8700 investment grows to $11100 in 13 years. If the investment has interest compounded quarterly, determine the interest rate.

A) 9.81% B) 2.38% C) 1.88% D) 19.59%

Answer 1

let the quarterly rate be j
(you will have to multiply j by 4 at the end to get the annual rate)

8700(1+j)^52 = 11100
(1+j)^52 = 1.275862..
take 52nd root, that is
1+j = 1.275862^(1/52) = .....

I matched one of your choices

Answer 2

I got C