Question

Problem 10 - Simple and Compound Interest Find the following effective rates of interest: a) Under simple interest rate of 4%. The effective rate of interest in the 9 th year is ig = b) Under simple interest rate of 4%. The effective rate of interest in the 13 th year is ia = %3D c) Under compound interest rate of 4%. The effective rate of interest in the 9 th year is i, d) Under compound interest rate of 4%. The effective rate of interest in the 13 th year is ij3 =

Pls, answer correctly. Skip if you don't know correct answer.

Answer 1

Answer of Part a)

In the question we have given Simple Rate of Interest = 4%

Year in which effective rate of interest has to calculate = 9th

So formula for calculate effective rate of interest in case of simple interest is: i*n

where "i" is Rate of Interest and "n" is number of years

after putting the values in the formula, i9 = 4*9 = 36%

Hence effective rate of interest in the 9th year under simple rate of interest at the rate of 4% is 36%

Answer of Part b)

In the question we have given Simple Rate of Interest = 4%

Year in which effective rate of interest has to calculate = 13th

So formula for calculate effective rate of interest in case of simple interest is: i*n

where "i" is Rate of Interest and "n" is number of years

after putting the values in the formula, i13 = 4*13 = 52%

Hence effective rate of interest in the 13th year under simple rate of interest at the rate of 4% is 52%

Answer of Part c)

In the question we have given Compound Rate of Interest = 4%

Year in which effective rate of interest has to calculate = 9th

So formula for calculate effective rate of interest in case of Compound interest is: [(1+i/n)^t] - 1

where "i" is Compound Rate of Interest, where "n" is number of compounding periods per year and "t" is number of years

after putting the values in the formula, i9 = [(1+4%)^9]-1 = 42.3312%

Hence effective rate of interest in the 9th year under compound rate of interest at the rate of 4% is 42.3312%

Answer of Part d)

In the question we have given Compound Rate of Interest = 4%

Year in which effective rate of interest has to calculate = 13th

So formula for calculate effective rate of interest in case of Compound interest is: [(1+i/n)^t] - 1

where "i" is Compound Rate of Interest, where "n" is number of compounding periods per year and "t" is number of years

after putting the values in the formula, i13 = [(1+4%)^13]-1 = 66.5074%

Hence effective rate of interest in the 13th year under compound rate of interest at the rate of 4% is 66.5074%