After 27 Months of Quarterly Compounding, a $3,000 Debt Had

question 224

Short Answer

After 27 months of quarterly compounding, a $3,000 debt had grown to $3,810. What effective rate of interest was being charged on the debt?

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Definitions:

Aggregate Demand

The collective requirement for goods and services in an economy, determined at a particular price point over a defined period.

Taxes

Compulsory contributions to state revenue, levied by the government on workers' income and business profits, or added to the cost of some goods, services, and transactions.

Aggregate Demand

The collective call for goods and services in an economy, marked at a certain price level for a given time interval.

Multiplier

The ratio of change in an economic output to a change in an input, such as the increase in public spending leading to a larger increase in the national income.