Answer
$5.09\%$
Work Step by Step
The effective rate of interest ($r_e$), is given by the formula
$r_e=(1+\frac{i}{n})^n-1$
where $i$ is the given nominal rate, $n$ is the number of compounding periods per year:
Use the formula above to obtain:
$r_e=\left(1+\frac{0.05}{4}\right)^4-1\\
r_e=1.050945337-1\\
r_e=0.050945\\
r_e \approx 5.09\%$
