## FIND Nominal interest rate

how do u do this ? Find the nominal interest rate that is equivalent to 18%/a compounded quarterly, if interest is paid monthly?

WOh confusing What do u do?

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 I'm not really sure if your given is 18%/a convertible quarterly or 18% convertible quarterly, however, i can try to help you in both; The formula used here should be $$(1 + \frac{i^{(4)}}{4})^4 = (1 + \frac{i^{(12)}}{12})^{12}$$ Whatever it is, you are given $$i^{(4)}$$. Solve for $$i^{(12)}$$
 Does this make sense I did all the calculations following an example problem its a little hard to write it out here but I wrote P(1+0.18/4)^4=P(1+i)^12 and solved for i finding the 12th root of the left side and then subtracting 1 i=0.001478 or 1.478% then to get the nominal rate I multiplied this by 12 so 12*1.478% and got = 17.736% Therefore 17.736%/a compounded monthly is equivalent to 18%/a compounded quarterly. IS THIS CORRECT?

## FIND Nominal interest rate

ANYONE KNOW IF MY PREVIOUS POSTS ANSWER IS CORRECT ANYONE???

 Quote by aisha ANYONE KNOW IF MY PREVIOUS POSTS ANSWER IS CORRECT ANYONE???
Hi there: