Ask Question
15 June, 09:04

You are offered an investment with a quoted annual interest rate of 10% with monthly compounding of interest. What is your effective annual interest rate?

+5
Answers (1)
  1. 15 June, 09:46
    0
    10.47%

    Explanation:

    Effective interest rate = (1 + i/n) ^n - 1

    i: Stated interest rate

    n: Number of compounding periods per year

    Effective annual interest = (1+10%/12) ^12 - 1

    = 10.47%
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “You are offered an investment with a quoted annual interest rate of 10% with monthly compounding of interest. What is your effective annual ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers