Q. The effective annual rate of interest of 2.1% compounded every three months is ______%
Answer in the book
[(1.021)? –1]×100 = 8.67%
Doubt
Why they haven't divided 2.1% of annual interest by 4 as it is compounded on quarterly basis?
FIA Forums
Ma2 Kaplan kit Q no 302
5y ago#1It's an error and it should be:
(1 + 0.021/4)^4 - 1 = 0.021166
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