# Interest vs Discount problem

• January 21st 2010, 08:08 PM
qwesl
Interest vs Discount problem
In an effective quarterly rate $k$ of compound interest, 1000 accumulates to 2500 in 20 years. What would be the value after $20$ years if the initial deposit of $1000$ had grown under an effective quarterly rate $k$ of compound discount?
• January 22nd 2010, 11:25 AM
Wilmer
Get k by solving: 1000(1 + k)^80 = 2500

I don't know what you mean by "discount"; negative k ?
• January 24th 2010, 04:45 AM
qwesl
Quote:

Originally Posted by Wilmer
Get k by solving: 1000(1 + k)^80 = 2500

I don't know what you mean by "discount"; negative k ?

Discount is related to interest by $(1+{i})(1-{d})=1$ but thanks. I understand what the problem is asking now.