The effective rate is 0.015 compounded quarterly.
As the interest is compounded quarterly, the rate will be 1/4 of the annual rate and time will be 4 times of the annual time because 1 year = 4 quarters.
Effective Rate = 6/4 % = 6/400 = 0.015 compounded quarterly.
Compound interest is calculated by multiplying the initial loan amount, or fundamental, with the aid of the one plus the once-a-year interest fee raised to the variety of compound durations minus one.
This can depart you with the whole sum of the loan which includes compound interest.
Compound interest causes your wealth to develop faster.
It makes an amount of cash develop at a quicker charge than simple interest because you'll earn returns on the money you invest, in addition to on returns at the end of each compounding period.
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