Finding the interest rate: Find the effective rate at which 5000 amounts to 12,000 in 5 months?

Question

Finding the interest rate: Find the effective rate at which 5000 amounts to 12,000 in 5 months?

Answer 1

The effective rate at which 5,000 amounts to 12,000 in 5 months is:

1. If compounded daily = 210.72% ==> 5000*(1+(2.1072/365))^((5/12)*365) = 12,000

2. If compounded monthly = 229.63% ==> 5000*(1+(2.2963/12))^5 = 12,000

3. If compounded quarterly = 276.37% ==> 5000*(1+(2.7637/4))^(5/3) = 12,000

4. If compounded semiannually = 371.85% ==> 5000*(1+(3.7185/2))^(5/6) = 12,000

5. If compounded annually = 717.54%==> 5000*(1+(7.1754))^(5/12) = 12,000