Final answer:
The effective annual rate of 8% compounded quarterly is 8.24%.
Step-by-step explanation:
The effective annual rate can be calculated using the formula:
Effective annual rate = (1 + (interest rate / number of compounding periods)) ^ number of compounding periods - 1
In this case, the interest rate is 8% and it is compounded quarterly, which means there are 4 compounding periods in a year. Plugging the values into the formula, we get:
Effective annual rate = (1 + (0.08 / 4))^4 - 1 = 0.0824 or 8.24%
The effective annual rate can be calculated using the formula:
Effective annual rate = (1 + (interest rate / number of compounding periods)) ^ number of compounding periods - 1
In this case, the interest rate is 8% and it is compounded quarterly, which means there are 4 compounding periods in a year.
Therefore, the effective annual rate of 8% compounded quarterly is 8.24%.