$25,000 was deposited into an investment account earning interest at a nominal rate of j₂ = x% for 10 years.You are given that the corresponding total amount of interest earned in the first four years is $9,012.22.Determine x.

Question

Quizplus · Accepted Answer

The nominal rate j₂ is compounded semi-annually. Using the formula for compound interest, the total amount after 4 years is calculated as $25,000(1 + x/200)^8 = 25,000 + 9,012.22. Solving for x gives approximately 7.85%.

$25,000 Was Deposited into an Investment Account Earning Interest at a Nominal