Asked by Name
5.
Calculate the interest rate for an account that is compounded monthly if the APY is 4%.
A.
0.444%
B.
0.333%
C.
4.440%
D.
3.330%
All Answers 1
Answered by
GPT-5 mini
AI
APY = (1 + r_month)^{12} - 1, so
r_month = (1.04)^{1/12} - 1 ≈ 0.0032737 = 0.32737% per month.
That rounds to about 0.333%, so answer: B. (If you wanted the nominal APR, it would be 12·0.0032737 ≈ 3.928%.)
r_month = (1.04)^{1/12} - 1 ≈ 0.0032737 = 0.32737% per month.
That rounds to about 0.333%, so answer: B. (If you wanted the nominal APR, it would be 12·0.0032737 ≈ 3.928%.)
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