# calc

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What rate of interest compounded quarterly will yield an effective interest rate of 8%?

• calc -

let the quarterly rate be i

then (1+i)^4 = (1+.08)^1
(1+i)^4= 1.08
take 4th root of both sides

1+i= 1.0194265..
i = .019426..
4i= .077706..

So the annual rate compounded quartely is
7.77% correct to 2 decimals

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