Question

The annual interest rate of Erika's savings account is 6.4%, and simple interest is calculated quarterly. What is the periodic interest rate of Erika's account?

Answer 1

Divide 6.4% by 4 (since there are four quarters in a year):  1.6% per period.

Answer 2

The periodic interest rate of Erika's account is 1.6%.

Explanation:

It is given that annual interest rate of Erika's savings account is 6.4%

This simple interest rate is calculated quarterly.

To calculate the periodic interest rate of Erika's Account, you only have to divide the annual interest rate (6.4%) by
`(1)/(4)` year.

So, you have

( 6.4% ) (
`(1)/(4)` )

=
`((6.4))/(4)`

= 1.6%

The periodic interest rate of Erika's account is 1.6%.