The effective rate of interest for 1 year is 12.55%.
The effective rate of interest is the actual interest rate that is paid on a loan. It takes into account the effect of compounding on the value of the interest rate.
Effective annual rate = (1 + APR / m ) ^m - 1
M = number of compounding
( 1 + 0.12 / 4)^4 - 1 = 12.55%
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