If compounding is done quarterly in year, the effective rate of interest is equal to

(1 + nominal rate of interest)/ 4

(1 + nominal rate of interest / 4)4

If compounding is done quarterly in year, the effective rate�

1.	If compounding is done quarterly in year, the effective rate of interest is equal to
A.	4 x nominal rate of interest
B.	(1 + nominal rate of interest / 4)4
C.	(1 + nominal rate of interest)/ 4
D.	All of the above
Answer» C. (1 + nominal rate of interest)/ 4