You wish to borrow $2,000 to be repaid in 4 quarterly installments of $550. The effective quarterly interest rate is a 4.0940%.
what is quarterly interest rate?
By dividing the annual interest rate by the number of periods when using monthly or quarterly interest rates rather than annual ones, you may determine the suitable rate. A 12 percent yearly interest rate, for instance, is converted to a three percent quarterly interest rate by dividing it by four periods.
A quarter is a three-month period on a business's financial calendar that serves as the foundation for regular financial reporting and dividend payments. One quarter, or one-fourth of a year, is denoted by the letters Q1, which stand for the first quarter, among other quarters, or by the year, as in Q1 2021. (or Q121).
compounding annually: Interest is computed and paid once a year. compounding per quarter: Interest is calculated and paid once every three months.
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