# Compound Interest-10th Grade-2

### From Homeworkwiki

**The nominal rate is 8% compounded quarterly. Find the effective rate.**

**Solution:** Nominal rate (R %) = 8%

Number of conversion period in a year (n) = 4

Effective rate = (1 + 8/400)^{4} - 1

=(1 + 0.02)^{4} - 1

= 1.0824 – 1= 0.0824

= 08.24/100

= 8.24%

So, the required effective rate of interest = 8.24%