Question

What interest rate, compounded quarterly, is equivalent to a 9.31% effective interest rate?

Answer 1

Answer:

 $F=1.09P$

Now,

$P(1+i)^4=1.09P$

$(1+i)^4=1.09$

$(1+i)=1.09^{^1/4}$

$(1+i)=1.09^{^1/4}-1$

$=0.02177818086$

the quarterly rate is about$=2.18\%$

RESULT

$2.18\%$