Asked by Latha
If a bank pays 2.4% interest compounded monthly on its certificate of deposit. What is the effective interest rate on annum
Answers
Answered by
Reiny
let the annual rate be i
1+i = (1 + .024/12)^12 = 1.02426
i = .02426 or
2.426 % per annum
The difference would be more significant for higher rates of interest.
1+i = (1 + .024/12)^12 = 1.02426
i = .02426 or
2.426 % per annum
The difference would be more significant for higher rates of interest.