SOLUTION: A certficate of deposit has an annual rate of 6% compounded quarterly. Find the effective rate of interest.

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Question 171467: A certficate of deposit has an annual rate of 6% compounded quarterly. Find the effective rate of interest.
Answer by jojo14344(1512) About Me  (Show Source):
You can put this solution on YOUR website!

Remember: I=%281%2B%28i%2Fm%29%29%5Em, calculated per year
where ---> system%28I=EffectiveInterest%2Ci=interest=0.06%2Cm=Compounded=4%29
So, I=%281%2B%280.06%2F4%29%29%5E4-1
I=%281.015%29%5E4-1=1.0614-1=0.0614x100%
highlight%28I=6.14percent%29, Effective Interest
Thank you,
Jojo