'Problem $3-16$

$5\mathrm{.}88$

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An investor has the opportunity to make an investment that will provide an effective annual yield of $18\mathrm{.}0$ percent. She is considering two other investments of equal risk that will provide compound interest monthly and quarterly, respectively.

Required:

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a$.$ What must be the equivalent nominal annual rate $($ENAR$)$ for an investment that will provide compound interest monthly to ensure that an equivalent annual yield of $18\mathrm{.}0$ percent is earned?

b$.$ What must be the equivalent nominal annual rate $($ENAR$)$ for an investment that will provide compound interest quarterly to ensure that an equivalent annual yield of $18\mathrm{.}0$ percent is earned?

References

Note: For all requirements, do not round intermediate calculations and round your final answers to $2$ decimal places.

a$.$ Equivalent nominal annual rate $-$ monthly compounding

b$.$ Equivalent nominal annual rate $-$ quarterly compounding

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