ANSWER :
12.551%
EXPLANATION :
The effective rate of interest formula is :
[tex]R=(1+\frac{r}{n})^n-1[/tex]where r = nominal rate interest
n = number of compounding in a year
From the problem, the nominal rate interest is 12% or 0.12
n = 4 (compounding quarterly, 4 times in a year)
Using the formula above :
[tex]\begin{gathered} R=(1+\frac{0.12}{4})^4-1 \\ R=0.12551\quad or\quad12.551\% \end{gathered}[/tex]