Find the effective rate of interest corresponding to a nominal rate of 7%/year compounded annually, semiannually, quarterly, and monthly. (Round your answers to two decimal places.)
annually semiannually quarterly monthly
using the formual of $\displaystyle r=(1+\frac{i}{n})^n-1$ where n is the number of compounding periods;
Annual - 7%
Semiannual - $\displaystyle r=(1+\frac{0.07}{2})^2-1=7.12\%$
Quarterly - $\displaystyle r=(1+\frac{0.07}{4})^4-1=7.19\%$
Monthly - $\displaystyle r=(1+\frac{0.07}{12})^{12}-1=7.23\%$