j=6.50%
m=Daily(365)
f(effective rate)=?
f=(1+i)^n
=(1+(.0650/365))^365
=1.067152848-1
=0.067152848
=6.72%
i know how to find the "f"
but if its
j=?
m=Quarterly(4)
f=3.25%
how do i find the "j"???
See repost:
http://www.jiskha.com/display.cgi?id=1269725770
To find the value of "j" given "m" as Quarterly (4) and "f" as 3.25%, you need to use the formula for the effective rate of interest.
The formula to find the effective rate of interest is:
f = (1 + i)^n
Where:
- "f" is the effective rate of interest
- "i" is the nominal interest rate
- "n" is the number of compounding periods per year
In this case, we have:
- "f" as 3.25%
- "n" as 4 (since it is quarterly)
To find "j", which represents the nominal interest rate, we need to rearrange the formula and solve for "i":
f = (1 + i)^n
3.25% = (1 + i)^4
To solve this equation for "i" the nominal interest rate, you can follow these steps:
1. Convert the percentage to a decimal by dividing it by 100:
3.25% = 0.0325
2. Rearrange the equation:
(1 + i)^4 = 0.0325
3. Take the fourth root of both sides of the equation to isolate "i":
1 + i = (0.0325)^(1/4)
4. Subtract 1 from both sides to solve for "i":
i = (0.0325)^(1/4) - 1
5. Simplify the expression:
i ≈ 0.007945 - 1
i ≈ -0.992055
Finally, convert the decimal back to a percentage:
j ≈ -0.992055 * 100
j ≈ -99.2055%
Therefore, the value of "j" is approximately -99.2055%.