monthly rate = .041/12 = .00341666..
let the effective annual rate be i
1 + i = (1 + .00341666..)^12
1+i = 1.0417783
i = .0417783 or
appr 4.18%
Kim has money in a savings account that earns an annual interest rate of 4.1%, compounded monthly. What is the effective rate of interest on Kim's account? Round to the nearest hundredth of a percent.
2 answers
Thanks for the help and explanation!