Interest rate

[Skaffa math guy]

What interest rate compounded monthly is equivalent to 8.8% discount rate compounded quarterly?

 

[Steven G]

Exactly what part of this problem are you having trouble with? If you show us your work we will be able to know where you are having trouble. So please please post your work.

 

[Deleted member 4993]

What interest rate compounded monthly is equivalent to 8.8% discount rate compounded quarterly?

Please follow the rules of posting in this forum, as enunciated at:

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Please share your work/thoughts about this assignment

 

[Skaffa math guy]

See the picture

 

[Deleted member 4993]

See the picture

Please tell us "which equations" you have used to calculate those numbers.

 

[tkhunny]

Please define "equivalent". How is such a thing demonstrated?

 

[Skaffa math guy]

The interest rate should be the same as the discount rate

 

[Skaffa math guy]

Please tell us "which equations" you have used to calculate those numbers.

Discount
P=S(1-d/m)^m*n --> *i took 100 as presentvalue* --> 100=S(1-8.8%/4)^4*1
Interest
S=P(1+i/m)^m*n --> see the picture^^^^

 

[tkhunny]

The interest rate should be the same as the discount rate

That makes no sense. If it is so, then there is no question at all.

Maybe the Interest EARNED would be the same?