Question

PLEASE ANSWER ASAP!! THANKS

1. What is the equivalent compound quarterly rate for 8.5% compound monthly? (convert from compound monthly to compound quarterly). Your answer below as a percent to 4 decimal places.

2.What is the equivalent compound weekly rate for 11% compound quarterly? (convert from compound quarterly to compound weekly). Your answer below as a percent to 4 decimal places.

Answer 1

1) Interest rate = 8.5% compounding monthly

Effective interest rate for compounding monthly=    (1 +i/k)^k -1

Effective interest rate for 8.5% compounding monthly = ( 1 + 0.085/12)¹² -1 = 8.83909055%

Effective interest rate for x% compounding quarterly = Effective interest rate for 8.5% compounding monthly

Effective interest rate for x% compounding quarterly = 8.83909055%

( 1 + x /4)⁴ - 1 = 0.0883909055

(1+x/4)⁴ = 1.0883909055

1+ X/4 = 1.0214008761

x/4 = 0.0214008761

x = 0.0856035044

equivalent compound quarterly rate for 8.5% compound monthly = 8.56035044%

2)

Interest rate = 11% compounding quarterly

Effective interest rate for compounding quaterly=    (1 +i/k)^k -1

Effective interest rate for 11% compounding quarterly = ( 1 + 0.11/4)⁴ -1 = 11.46212594%

Effective interest rate for x% compounding weekly= Effective interest rate for 11% compounding quarterly

Effective interest rate for x% compounding weekly = 11.46212594%

( 1 + x /52)⁵² - 1 = 0.1146212594

(1+x/52)⁵² = 1.1146212594

1+ X/52 = 1.0020889995

x/52 = 0.0020889995

x = 0.108627974

equivalent compound weekly rate for 11% compound quarterly= 10.8627974%