SOLUTION: Find the nominal rate corresponding to an effective rate of 5.85% if interest is compounded quarterly.

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Question 1167250: Find the nominal rate corresponding to an effective rate of 5.85% if interest is compounded quarterly.
Answer by ikleyn(52855) About Me  (Show Source):
You can put this solution on YOUR website!
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Find the nominal rate corresponding to an effective highlight%28annual%29 rate of 5.85% if interest is compounded quarterly.
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            See how I edited your post in order for it would make sense. 


Let "r" be the nominal rate.


Then your equation is


    %281%2Br%2F4%29%5E4 = 1.0585.


Take the root of the degree 4 from both sides


    1 + r = 1.014315.


It implies


    r = 1.014315 - 1 = 0.014315.      


Then the nominal annual rate is 4*0.014315 = 0.05726 = 5.726%.       ANSWER

Solved.

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To see many other similar solved problems, look into the lesson
    - Problems on discretely compound accounts
in this site, and learn the subject from there.


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Also,  you have this free of charge online textbook in ALGEBRA-I in this site
    - ALGEBRA-I - YOUR ONLINE TEXTBOOK.

The referred lesson is the part of this online textbook under the topic "Logarithms".


Save the link to this online textbook together with its description

Free of charge online textbook in ALGEBRA-I
https://www.algebra.com/algebra/homework/quadratic/lessons/ALGEBRA-I-YOUR-ONLINE-TEXTBOOK.lesson

to your archive and use it when it is needed.


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