Arithmetichard · Past Paper
The effective annual rate of interest corresponding to a nominal rate of 12% p.a. compounded quarterly is:
A12%
B12.55%
C12.48%
D12.62%
✓ Correct Answer: B — 12.55%
Effective rate = (1 + 0.03)^4 - 1 = 1.125508 - 1 = 12.55%.
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