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an investment that returns a nominal 4.2% yearly rate, but is compounded quarterly, has an effective yearly rate of what?

 Nov 29, 2016
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4.2 %  is 1.05% per period (3 months...or 'quarterly

 

(1+i)^4  =  1.0105)^4 = 1.042666      or    4.2666% annually

 Nov 29, 2016
edited by ElectricPavlov  Nov 29, 2016

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