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An investment offers to quadruple your money in 18 months (don’t believe it). required: what rate per three months are you being offered? (round your answer as directed, but do not use rounded numbers in intermediate calculations. enter your answer as a percent rounded to 2 decimal places (e.g., 32.16).)

Respuesta :

Let us assume that amount invested = 100

It quadruples meaning , it becomes = 100*4 = 400

We use the future value formula here

FV = PV*(1+r)^n

here FV = 400

PV = 100

n = 18 months or 18/3 = 6 quarters (Since we need a three month rate)

400 = 100*(1+r)^6

4 =1*(1+r)^6

r = 4^(1/6) -1

r = 1.2599 -1 = 0.2599

Interest rate being offered = 25.99% (Rounded to 2 decimals)

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