# SOLUTION: A certificate of deposit mhas an annual rate of 6% compounded quarterly. Find the effective rate of interest. Show your work.

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 Question 176415: A certificate of deposit mhas an annual rate of 6% compounded quarterly. Find the effective rate of interest. Show your work.Answer by stanbon(57978)   (Show Source): You can put this solution on YOUR website!A certificate of deposit has an annual rate of 6% compounded quarterly. Find the effective rate of interest. --------------------------- A(t) = P(1+(r/n))^(nt) -------------- Annual multiplier = (1+ (0.06)/4)^(4*1) = (1+0.015)^4 = 1.06136 ------------- Annual interest rate = 0.06136 or 6.136% ========================================== Cheers, Stan H.