Question

consider a saving account which pays a nominal interest at 8% per annum, paid quarterly. Calculate the effective annual interest rate per annum

Answer 1

ive looked for it on the internet to be honest
i found something that might help :
r = (1+ i/n)^n - 1
r - effective annual rate
i - nominal rate
n - number of compounding periods per year
r = (1 + 0.08/4)^4 - 1 = 0.0824 -> 8.24%

http://en.wikipedia.org/wiki/Effective_interest_rate

hope it helps

Answer 2

thank you

Answer 3

you are welcome