Question

The effective rate of interest for one year corresponding to a nominal at 7% rate of interest per annum convertible quarterly is​

Answer 1

Answer:

7.19%

Step-by-step explanation:

let p=100

p compounded quarterly at 7% rate, the amount is

100(1+(.07/4))^4

=107.19

on simple interest for what rate does 100 becomes 107.19

100-107.19 = 7.19

7.19 = 100×4×(r/4)

r= 7.19%

effective rate = 7.19%

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