Find the effective rate of return equivalent to declared rate of 12% compounded quaterly.

[Use $(1.06)^2=1.1236, (1.03)^4=1.1255$ and $(1.01)^2= 1.1268, e^{0.12}= 1.1275$]

12.55%

The correct answer is option (3) : 12.55%

Given r = 12% p.a

P = 4 quarter

So, effective rate (per rupee) $=\left(1+\frac{12}{200}\right)^4-1$

$= (1.03)^4-1$

$= 0.1255$

Hence, effective rate $= 0.1255 ×100$%

= 12.55%