Question

What should be the rate of interest per annum if interest is calculated quarterly?
a. reduced to half
b. reduced to one fourth
c. is doubled
d. becomes four times

Answer 1

" (b) reduced to one fourth"

if we will calculate interest quarterly, the rate of interest will be divided by one fourth.

For example,

if your annual interest rate = 8 %

divide 8 by 4 to find that the quarterly interest rate is 2 percent. 

i.e., 8 × 1/4 = 8/4 = 2%

hope it is helpful ✌️

Answer 2

The interest per annum is reduced to one fourth

• The proper quarter refers to a particular fraction of a specific number which is - 1/4.
• For example, a 16 percent annual interest rate divided by four specific periods correctly is a four percent quarterly interest rate.
• This is expressed as - 1/4 = 16/4 = 4.
• Thus, while determining either simple interest or compound interest, if preferred interest is calculated quarterly, it will be 1/4.