Question

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

Answer 1

Compounded quarterly rate = 11%

Effective quarterly rate = 11%/4 = 0.0275

That is 2.75% for 52/4 = 13 weeks

Effective weekly rate = (1 + Effective quarterly rate)^(1/13) - 1

Effective weekly rate = (1 + 0.0275)^(1/13) - 1

Effective weekly rate = 1.0020889995 - 1

Effective weekly rate = 0.0020889995

Effective weekly rate = 0.20889995%

Compounded weekly rate = 0.20889995% * 52

Compounded weekly rate = 0.108627974

Compounded weekly rate = 10.8628%