Question

Calculate the effective rate of interest for a saving account paying a nominal rate of 3.65%
compounded quarterly.
(a) 0.037
(b) 0.048
(c) 0.025
(d) 0.061​

Answer 1

Given :  a saving account paying a nominal rate of 3.65%  compounded quarterly.

To Find :  Calculate effective rate of interest

(a) 0.037

(b) 0.048

(c) 0.025

(d) 0.061​

Solution:

Let say Principal = P

rate of interest = 3.65 % compounded quarterly.

rate of interest  per Quarter  R = 3.65/4

1 year n = 4 Quarters

A = P(1 + R/100)ⁿ

=> A = P (1 + 3.65/400)⁴

=> A =  P (1.037)

=> A = 1.037P

interest Earned  = A - P

= 1.037P - P

= 0.037P

P * R * 1/100 =  0.037P

=> R = 3.7  %

effective rate of interest = 3.7 %  = 0.037

option a is correct

Learn More:

if nominal rate of interest is 10% per annum and annual effective ...

https://brainly.in/question/21237615

4: In a particular loan the interest rate per month is 1%then, the ...

https://brainly.in/question/26088018