Answer:
11.72% or .1172
Step-by-step explanation:
I'm going to assume that A= future or accumulated Value and P= Present value
To solve this we're going to need to use the following formula
Where i is the interest rate
n is the number of times compounding a period
t is the number of periods (in this case years)
So we have
5000=1250(1+i/4)^48
Solving this isn't that hard and can be done in a couple of steps
first divide both sides by 1250
5000/1250=(1+i/4)^48
Now cancel out the exponent by doing the 48th root
1.0293=1+i/4
subtract 1 and multiply both sides by 4 to get
i=.1172
This means that i= 11.72%
