document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1190789>Question 1190789</A>: <I><SPAN STYLE=\"word-break: break-all;\"> What is the effective annual rate of nominal of 4% compounded quarterly? </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #822494 by </B><A HREF=/tutors/aboutme.mpl?userid=Theo><B>Theo(13342)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=Theo><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/cgi-bin/show-face.mpl?user=Theo><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=822494\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> to find the effective annual rate, you do the following:\r<BR>\n" );
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document.write( "divide 4% by 4 to get 1% per quarter.<BR>\n" );
document.write( "divide that by 100 and add it to 1 to get a growth factor of 1.01 per quarter.<BR>\n" );
document.write( "raise that to the 4th power to get a growth factor of 1.01 ^ 4 = 1.04060401 per year.<BR>\n" );
document.write( "subtract 1 from that and multiply it by 100 to get an effective interest rate of 4.060401% per year.\r<BR>\n" );
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