Summarize the varying effective interest rates per payment period under compounding frequencies?

Century 21 Accounting General Journal
11th Edition
ISBN:9781337680059
Author:Gilbertson
Publisher:Gilbertson
Chapter18: Acquiring Capital For Growth And Development
Section18.1: Short-term Debt Financing
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Summarize the varying effective interest rates per payment period under compounding frequencies?

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The varying effective rate per payment period in case of compounding frequencies as under:

When compounding is done monthly, then

Finance homework question answer, step 1, image 1

When compounding is done quarterly, then

Finance homework question answer, step 1, image 2

 

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