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Ken Garrett.
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Muskan558
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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?
Ken Garrett
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It’s an error and it should be:
(1 + 0.021/4)^4 – 1 = 0.021166
Muskan558
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