The defective rate of interest corresponds to the nominal rate of interest after accounting for any defects or errors in the interest calculation. To calculate the defective rate of interest, we need to consider the nominal rate and the compounding period.

Given:
Nominal rate of interest = 7% p.a (per annum)
Compounding period = Quarterly

To find the defective rate of interest, we can use the formula:

Defective rate of interest = (1 + (Nominal rate / Compounding periods))^Compounding periods - 1

In this case, the compounding period is quarterly, which means interest is compounded four times a year.

Using the formula, we can calculate the defective rate of interest:

Defective rate of interest = (1 + (7% / 4))^4 - 1

Calculating this expression gives us the defective rate of interest.

Now, let's calculate the defective rate of interest step by step.

Step 1: Convert the nominal rate to decimal form:
Nominal rate = 7% = 7/100 = 0.07

Step 2: Divide the nominal rate by the compounding periods:
Nominal rate / Compounding periods = 0.07 / 4 = 0.0175

Step 3: Add 1 to the result from step 2:
1 + (Nominal rate / Compounding periods) = 1 + 0.0175 = 1.0175

Step 4: Raise the result from step 3 to the power of the compounding periods:
(1 + (Nominal rate / Compounding periods))^Compounding periods = (1.0175)^4 = 1.071822

Step 5: Subtract 1 from the result from step 4 to get the defective rate of interest:
Defective rate of interest = 1.071822 - 1 = 0.071822

Finally, converting the defective rate of interest to a percentage gives us:

Defective rate of interest = 0.071822 * 100% = 7.1822%

Therefore, the defective rate of interest corresponding to a nominal rate of 7% p.a convertible quarterly is 7.1822%, which is approximately 7.18%.

Therefore, the correct option is (d) 7.18%.