Answer:
<em>The effective annual rate is 11.03%</em>
Step-by-step explanation:
The effective interest rate is calculated through the formula:
In this formula, r represents the effective interest rate, i represents the stated interest rate or APR, and n represents the number of compounding periods per year.
For a quarterly compounded interest, n=4. The APR i=10.60%=0.106
Given an APR r, the effective annual rate for a quarterly compound is:
The effective annual rate is 11.03%