Question
A bank pays 10% compounded annually on its three-year fixed deposit account. At the end of the three years, a 3% bonus on the final amount will be paid. find the effective interest rate that will be earned on this scheme
Answers
Steve
1.1^3 * 1.03 = 1.37093
∛1.37093 = 1.11089
so, an effective rate of about 11%
∛1.37093 = 1.11089
so, an effective rate of about 11%