Answer
The effective rate is 6.35%
Work Step by Step
Using the formula, we get
$(1+\frac{0.062}{4})^{4}-1=0.0635$
The effective rate is 6.35%
Calculus with Applications (10th Edition)
by Lial, Margaret L.; Greenwell, Raymond N.; Ritchey, Nathan P.
Published by
Pearson
ISBN 10:
0321749006
ISBN 13:
978-0-32174-900-0
Chapter 2 - Nonlinear Functions - 2.6 Applications: Growth and Decay; Mathematics of Finance - 2.6 Exercises - Page 108: 16
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