Deposits of $425 are made quarterly in an investment. The first deposit is made on February...

Deposits of $425 are made quarterly in an investment. The first deposit is made on February 15, 2014 and the last deposit is made on August 15, 2024. Find the nominal rate converted quarterly that is earned if the account balance just after the last deposit on August 15, 2024 is $28966.54.

Expert Solution

Answer : Calculation of Nominal Rate converted Quarterly :

Using RATE function of Excel :

=RATE(nper,pmt,pv,fv)

where

nper is the number of deposits i.e 42

pmt is 425

pv is 0

fv is future value i.e 28966.54

=RATE(42,425,0,28966.54)

Therefore Rate of interest is 2.22% quarterly or 8.86% per annum compounded quarterly.

jeff jeffy answered 2 years ago

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