Final answer:
The effective annual rate for an APR of 7.9% compounded quarterly is 0.0826.
Step-by-step explanation:
The effective annual rate (EAR) is a measure of the total yearly cost of borrowing. To calculate the EAR, we need to take into account the compounding periods of the interest rate. In this case, the APR is 7.9% compounded quarterly. To convert it into an effective annual rate, we use the formula: EAR = (1 + (APR/n))^n - 1, where APR is the annual percentage rate and n is the number of compounding periods in a year.
Plugging in the values, we have: (1 + (0.079/4))^4 - 1 = 0.0826
Therefore, the effective annual rate for an APR of 7.9% compounded quarterly is 0.0826, rounded to four decimal places.