From: "Tumbleweed" 
Newsgroups: uk.finance
Subject: Re: 2 quick questions (calculating interest)
Date: Tue, 11 Jul 2006 20:28:24 +0100


"Tim"  wrote in message news:bLqdnfDWDIP7by7ZRVnysA@bt.com...
> "Claire" wrote
>> How much will accumulate in an account with
>> an initial deposit of $100, and which earns 10%
>> interest compounded quarterly for three years?
>> A) $107.69
>> B) $133.10
>> C) $134.49
>> D) $313.84
>
> Now that depends on whether it is
> "10% per quarter" or "10% per annum"!
>
> If "10% per quarter", then Joe is right;  but
> the question setter might be expecting you to
> use "10% per annum, compounded quarterly",
> in which case the correct answer is:
>
> C) $134.49
>
> "Claire" wrote
>> and how much must be invested today in
>> order to generate a five-year annuity of
>> $1,000 per year, with the first payment one
>> year from today, at an interest rate of 12%?
>> A) $3,604,78
>> B) $3,746.25
>> C) $4,037.35
>> D) $4,604.78
>
> I can't see where Joe got his answer
> here;  the correct answer is, of course, :-
>
> A) $3,604,78
>

hence my 'LOL' they really shouldnt expect that just because you get an 
answer on usenet its right ...welcome to wiki_finance_net where the answers 
might be correct, but with no workings, how is anyone to know:?

-- 
Tumbleweed

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