Interest rate conversion.

How to solve the following using TI-BA2 plus pro and otherwise? Thanks in advance. The effective annual yield (EAY) of a loan with a quoted rate of 8%, compounded quarterly is equivalent to the EAY of a loan with a continuously compounded quoted rate of: A) 8.16%. B) 8.08%. C) 8.24%. D) 7.92%.

8% = ((1+(x)/4))^4) - 1 x=7.77% e^7.77% = 8.08% (B) beware this is the first time i’ve used my brain since June… we may want confirmation for another AF’r

Wouldn’t it be LN(1+8.24%)? = 7.92%? Wow…not sure I’m ready to be dusting the cobwebs

yes cjones you’re correct, i “read” the question backwards… rusty brain so i will go back to offseason hiding… i cant even think about this stuff till after the holidays!

Yes D is the correct answer! How do we do it using the TI, anyone?

0.08- divide - 4 - equals = 0.02 plus - 1 - equals = 1.02 raised (y^x button above #9) to the 4th - equals = 1.0824 natural logarithm (LN button left of #7) - equals = 0.0792

Lol… Obviously I knew that. I was just looking forward to some shortcuts using the PV keys, ICONV or any other creative methods. :wink: