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Q: How much money should be invested at an annual interest rate of 8 percent in order to earn 250 of yearly interest?

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3125

2500

2500

$73053.88 when compounded month your yearly rate would be 0.061678% * * * * * True, but in real life the quoted interest rate, "6 percent compounded monthly", should read "an interest rate, such that, if it were compounded monthly, would give an annual equivalent rate of 6 percent". The equivalent of 6% annual is 0.487% monthly since 1.0048712 = 1.06

To find 8% of an amount we multiply by 0.08 So we have an amount $x: $x x 0.08 = $250 Rearranging gives $x = 250/1.08 = $3125

2,500

if .65 is annual rate.. and you are calculating annual interest.. then 75000*.65/100 = 487.5 annual intrest just make sure the interest rate and period should be same. for example you need to calculate monthly intrest from above equation then u have to divide your answer by 12 487.5/12 = 40.625 monthly intrest

Annual Equivalent Rate - AERInterest that is calculated under the assumption that any interest paid is combined with the original balance and the next interest payment will be based on the slightly higher account balance. Overall, this means that interest can be compounded several times in a year depending on the number of times that interest payments are made.In the United Kingdom, the amount of interest received from savings accounts is listed in AER form.Calculated as:Where:n = number of times a year that interest is paidr = gross interest rateInvestopedia Says:For example, a savings account with a quoted interest rate of 10% that pays interest quarterly would have an annual equivalent rate of 10.38%. Investors should be aware that the annual equivalent rate will typically be higher than the actual annual rate calculated without compounding.Above retrieved from Answers.comViper1

change the percent to a decimal

change the percent to a decimal

It is not - or at least, it should not be.

4795.65 (approx).

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