Let's say you want to convert a yearly discount rate of 5% to the equivalent discount rate in terms of quarters. This means that if you were to apply this discount four times it would be equivalent to applying a 5% discount once.
First of all, you are scaling down to a smaller period, so make sure that button is selected. Enter 5 into the rate input area and enter a scaling factor of 4 (since there are four quarters in a year). Press the 'Submit your query' button and it will give you the answer, which is 1.227223%
If you borrowed money and are paying 3% monthly, what yearly rate are you being charged?
Now you're scaling up to a larger period, so make sure the scaling up button is selected. Enter 3 for the rate and 12 for the factor and submit. It will return the rate of 42.576089%.
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