Question

Wyatt is paying back a loan with a nominal interest rate of 13.62%. If the interest is compounded quarterly, how much greater is Wyatt’s effective interest rate than his nominal interest rate

The correct answer is
D.0.71 percent points

Answer 1

R=(1+i/m)^m)-1
R=(1+0.1362/4)^4)-1=0.1433*100=14.33%
So 14.33%-13.62%=0.71