The effective rate that is equivalent to the nominal rate of 8% compounded quarterly is :

8.24%

The correct answer is Option (1) → 8.24%

Effective Annual Rate (EAR) = $\left(1+\frac{r}{n}\right)^n-1$

r = nominal annual rate = 8% = 0.08

n = 4 (number of compounding periods)

$EAR=\left(1+\frac{0.08}{4}\right)^4-1$

$=(1.02)^4-1$

$≃1.0824-1=0.0824$

$∴EAR=0.824×\frac{100}{100}$

$≃8.24\%$