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What is the effective interest rate of 8% compounded quarterly?

 Jun 1, 2018
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Effective rate =[ 1 + i/n]^n, where i =APR and n = Number of compounding periods

 

Effective rate =[1 + 0.08 / 4]^4

                      =[ 1.02]^4

                      = 1.08243216 -1 x 100 =8.243216% - Effective annual rate

 Jun 1, 2018

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