Note That The Interest Rate Is Prorated For Interest Accumulated Before The Year

Note that the interest rate is prorated for interest accumulated before the year is up. For example, if the annual rate is 12%, the amount compounded after 1 month is only 1%. (a) Suppose interest accrues quarterly (four times per year). I. What is the balance at the end of the first quarter (in terms of P and r)? [Hint: the interest rate for 1 quarter is r/4.] Ii. What is the balance at the end of the second quarter? Iii. What is the balance at the end of the third quarter? Iv. What is the balance at the end of the first year? (Four quarters) v. What is the balance after t years?

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