One payment stream is being compared to another. The first option is for $600 quarterly payments over 8 years at an interest rate of 4% compounded quarterly. The second option is for $50 monthly payments over 8 years, with interest compounded monthly. Determine the nominal rate of interest to be offered on the second option for both options to have equal future values.

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The Answer of One payment stream is being compared to another. The first option is for $600 quarterly payments over 8 years at an interest rate of 4% compounded quarterly. The second option is for $50 monthly payments over 8 years, with interest compounded monthly. Determine the nominal rate of interest to be offered on the second option for both options to have equal future values.

One Payment Stream Is Being Compared to Another