Please answer this question, Thank you Find the nominal interest rate compounded quarterly which could be used instead of 8%compounded monthly. What is the corresponding effective interest rate then?

In this we have to find effective interest rate in both cases and find equivalent rate.

Answered: Find the nominal interest rate…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 45P

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Similar questions

(1) What is the value at the end of Year 3 of the following cash flow stream if the quoted interest rate is 10%, compounded semiannually? (2) What is the PV of the same stream? (3) Is the stream an annuity? (4) An important rule is that you should never show a nominal rate on a time line or use it in calculations unless what condition holds? (Hint: Think of annual compounding, when INOM = EFF% = IPER.) What would be wrong with your answers to parts (1) and (2) if you used the nominal rate of 10% rather than the periodic rate, INOM/2 = 10%/2 = 5%?
If the effective annual interest rate is 8%, what is the nominal annual rate if compounding is bi-monthly?
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A nominal interest rate of 11.333%, continuously compounded, yields an effective annual interest rate of how much?
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Find the nominal interest rate compounded quarterly which could be used instea compounded monthly. What is the corresponding effective interest rate then?