Le: Convert an interest rate of 12% p.a. compounded monthly to an interest rate compounded quarterly.

Question

asked Jun 21, 2022 172k views

1 Answer

Ilya Dmitriev · Answer 1 · 2022-06-27T20:19:39+0000

9514 1404 393

Answer:

12.1204%

Explanation:

The nominal annual rate is 4 times the effective quarterly rate:

(1 +0.12/12)^3 = 1.030301

so the effective quarterly rate is 3.0301%.

The equivalent annual rate compounded quarterly is 12.1204%.