Math
posted by Amanda .
Find the effective rate corresponding to the given nominal rate. (Round your answer to the nearest hundredth of a percentage point.)
(a) 4%/year, compounded quarterly
? %
(b) 3%/year, compounded monthly
? %

let the effective rate in each case be i
a)
so (1+i)^1 = 1.1^4
1+i = 1.040604
i = .040604 = 4.06%
f)
3% compounded monthly  monthly rate of .0025
1+i = 1.0025^12 = 1.0304059..
rate = .0304 or 304% 
(1+r)^12 = 1.03
1+r = (1.03)^1/12
1+r = 1.00246627
r = 0.00246627
r % = .247 % monthly
Respond to this Question
Similar Questions

Math  Compound
If a bank offers interest at a nominal rate of 6%, how much greater is the effective rate if interest is compounded continuously than if the compounding is quarterly? 
math help plz!
DigiCom wants to drop the effective rate of interest on its credit card by 2%. If it currently charges a nominal rate of 8% compounded daily, at what value should it set the new nominal rate? 
Finite Math
Find the effective rate corresponding to the given nominal rate. (Round your answer to two decimal places.) 11%/year compounded semiannually 
Finite Math
Find the effective rate of interest corresponding to a nominal rate of 6%/year compounded annually, semiannually, quarterly, and monthly. (Round your answers to two decimal places.) 
Math
Find the effective rate corresponding to the given nominal rate. (Round your answer to the nearest hundredth of a percentage point.) (a) 4%/year, compounded quarterly ? 
math
Find the present value of $31,000 due in 4 yr at the given rate of interest. (a) 6%/year, compounded quarterly $ ? 
math
Find the present value of $31,000 due in 4 yr at the given rate of interest. (a) 6%/year, compounded quarterly $ ? 
math
Find the present value of $31,000 due in 4 yr at the given rate of interest. (a) 6%/year, compounded quarterly $ ? 
math
Find the effective rate corresponding to the given nominal rate. (Round your answer to the nearest hundredth of a percentage point.) (a) 7%/year, compounded daily % (b) 6%/year, compounded monthly % 
math
Shannon invests $3,000, at 8% interest, compounded quarterly for one year. Use Table 111 to calculate the effective interest rate for her investment. (Round the effective rate to the nearest hundredth percent.)