Annuity effective rate of interest compounding quarterly

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1. Effective Rate of Interest

2. (1+i) n-1 P = 100 R = 10 % Compounded Half yearly 100x10/100 x6/12 = 5 A = 100 + 5 = 105 105x10/100x6/12 = 5.25 105 + 5.25 110.25 110.25-100 = 10.25 10% Compounded Half Yearly 10.25 % Compounded Yearly

3. Which One is Better (1+i) n-1 8% p.a Compounded Quarterly or 8.5% Comp ounded Annually Effective Rate of Interest Quarterly (1+0.8/4) 1x4 -1 0.0824x100 8.24%