The document discusses different methods for calculating periodic interest rates from an annual interest rate. Specifically: 1. One method is (1+annual rate)^(1/periods per year) - 1, which gives a quarterly rate of 1.94% from an 8% annual rate. 2. Another consultant proposed 1 - (1/(1+annual rate)^(1/periods per year)), which gives 1.91%, but the validity of this method is unclear. 3. Paying interest periodically versus as a lump sum at the end of the year would have different costs depending on the interest rate that could be earned elsewhere. The effective annual rate assumes the same rate applies to all, which may