Question 3:

a) What is the effective annual rate of interest if $1200 grows to $1600 in 2 years compounded monthly ?

The effective annual rate of interest as a percent is ___%.

(Round the final answer to four decimal places as needed. Round all intermediate values to six decimal places as needed.)

b) What is the nominal rate of interest compounded quarterly if the effective rate of interest on an investment is 7.9%?

The nominal rate of interest is ___compounded quarterly

(Round the final answer to four decimal places as needed. Round all intermediate values to six decimal places as needed.)

c) A bank pays 5.6% compounded semi-annually on certain types of deposits. If interest is compounded quarterly, what nominal rate of interest will maintain the same effective rate of interest?

The nominal rate of interest is ___%

(Round the final answer to four decimal places as needed. Round all intermediate values to six decimal places as needed.