The rate on a $4,000, 12% investment compounded quarterly for four years is 4%.

Name: The rate on a $4,000, 12% investment compounded quarterly for four years is 4%.
Brand: Quizplus
Rating: 5.0 (36 reviews)

Question

Quizplus · Accepted Answer

The given information is contradictory. If an investment is compounded quarterly at a rate of 12%, then the effective annual rate would be higher than 12% (due to the compounding effect). Therefore, it is not possible for the rate to be 4% for the same investment over the same period.

The Rate on a $4,000, 12% Investment Compounded Quarterly for Four