Scotia Bank offers a 4-year rate raiser RRSP. The annual compound rates are 2.5%, 3.2%, 3.8% and 4.2%. Determine the average annual rate of interest earned during the four year period.

Question

Quizplus · Accepted Answer

The average annual rate of interest is calculated by adding the annual rates together and dividing by the number of years. So, (2.5% + 3.2% + 3.8% + 4.2%) / 4 = 13.7% / 4 = 3.425%. The closest option to this calculation is 3.423%.

Scotia Bank Offers a 4-Year Rate Raiser RRSP