Marla has withdrawn $5000 from a line of credit. If she makes no payments, in 3 years she will owe $6435.09. What quarterly compounded interest rate was Marissa being charged?
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principal amount = $5, 000
sum accumulated in 3 years with interest compounded quarterly - 4*3=12 times compounded.
interest rate per quarter = r %
$ 6, 435.09 = $5, 000 ( 1 + r/100)^12
1 + r/100 = 1.02125
r = 2.125 %
annual rate = $ r = 8.5 %
quarterly rate of interest 2.125 %
sum accumulated in 3 years with interest compounded quarterly - 4*3=12 times compounded.
interest rate per quarter = r %
$ 6, 435.09 = $5, 000 ( 1 + r/100)^12
1 + r/100 = 1.02125
r = 2.125 %
annual rate = $ r = 8.5 %
quarterly rate of interest 2.125 %
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