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Find the constant force of interest equivalent to a nominal annual rate of interest of 5.6 compounded quarterly.

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Final answer:

The constant force of interest equivalent to a nominal annual rate of interest of 5.6% compounded quarterly is 5.71%.

Step-by-step explanation:

To find the constant force of interest equivalent to a nominal annual rate of interest of 5.6% compounded quarterly, we can use the formula:

Force of interest = (1 + nominal rate/n)ⁿ - 1

Where n is the number of compounding periods per year. In this case, since the interest is compounded quarterly, n = 4.

Substituting the values into the formula, we have: Force of interest = (1 + 0.056/4)^4 - 1 = 0.0571 or 5.71%

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