Question

Suppose that a savings account pays 7.4 percent interest compounded quarterly. What is the quarterly compound interest rate?Answer =____percent.

Answer 1

Answer

1.85 percent

Explanation

Note: there are 4 quarters in a year.

Since the savings account pays 7.4 percent interest compounded quarterly,

Therefore, the quarterly compound interest rate will be 7.4/4 = 1.85 percent