Answer:
3.92%
Step-by-step explanation:
To find the interest rate compounded quarterly that results in an APY of 4%, we can use the formula for APY:
APY = (1 + r/n)^n - 1
where r is the interest rate and n is the number of compounding periods per year (quarterly in this case).
Plugging in the values:
4% = (1 + r/4)^4 - 1
Solving for r, we find that the interest rate should be approximately 3.92% when compounded quarterly.