# How do you manual calculate this finance formula:Equivalent discount rate = (1 + 0.22)^1/4 – 1 the a

How do you manual calculate this finance formula:Equivalent discount rate = (1 + 0.22)^1/4 – 1 the answer is \$5.10% but my problem is that I do not know the easy way to do the exponent of the fraction 1/4.Your bank is offering you an account that will pay 22 %22% interest in total for a two-year deposit. Determine the equivalent discount rate for a period length of: a. Six months. b. One year. c. One month.a. Six months. We use our general rule for computing discount rates: Equivalent discount rate equals left parenthesis 1 plus r right parenthesis Superscript n Baseline minus 1Equivalentdiscountrate=(1+r)n?1 Since six months is 6/24 or one fourth of two years: Equivalent discount rate equals left parenthesis 1 plus 0.22 right parenthesis Superscript 1 divided by 4 Baseline minus 1 equals 5.10 %Equivalentdiscountrate=(1+0.22)1/4?1=5.10% b. One year. Since one year is half of two years: Equivalent discount rate equals left parenthesis 1 plus 0.22 right parenthesis Superscript 1 divided by 2 Baseline minus 1 equals 10.45 %Equivalentdiscountrate=(1+0.22)1/2?1=10.45% c. One month. Since one month is 1/24 of two years: Equivalent discount rate equals left parenthesis 1 plus 0.22 right parenthesis Superscript 1 divided by 24 Baseline minus 1 equals 0.83 %Equivalentdiscountrate=(1+0.22)1/24?1=0.83%

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