Asked by Alyssa Squissato on May 13, 2024
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To the nearest day, how long will it take a $20,000 investment to grow to $22,000 (including the accrued interest) if it earns 7% compounded quarterly? Assume that a quarter-year has 91 days.
Compounded Quarterly
The process in which interest is calculated on the principal and the accumulated interest over a quarter (three months) and is added to the principal for calculating future interest.
Accrued Interest
Interest that has accumulated over a period but has not yet been paid or officially recorded.
- Ascertain the period needed for investments to increase to a predetermined sum with different compounding frequencies.
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Learning Objectives
- Ascertain the period needed for investments to increase to a predetermined sum with different compounding frequencies.