Question

suppose you put $125 into a bank account today. interest is paid annually and the annual interest rate is 4.75 percent. the future value of the $125 after 19 years is

Answer 1

The rate that is applied over the course of a year is referred to as the annual interest rate.

What is annually interest?

The rate that is applied over the course of a year is referred to as the annual interest rate. Interest rates may be charged on a monthly, quarterly, or biannual basis, among other timescales. But interest rates are typically expressed as annual amounts.

The annual percentage rate (APR) is figured by dividing the periodic interest rate by the number of periods that make up a year. No information is provided on the number of times the rate is actually applied to the amount.

Below is the formula and the calculations: Effective yearly interest rate is calculated as (1 + (nominal rate x number of compounding periods)) x (number of compounding periods) - 1.

Therefore, the answer is $301.88.

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