What simple interest rate is equivalent to a compound interest rate of 6% p.a. over 10 years correct to two decimal places?

3 answers

Let's compare the value of $1 at the end of 10 years at both types of interest:

compound: Value = 1(1.06)^10

simple: let the rate be r
interest = 1(10)(r) = 10r
value = 1 + 10r

so 1 + 10r = 1.06^10
10r = 1.790847... - 1
r = .0790847...
rate = 7.91% to 2 decimals
wtf am i looking at not helpful man im 13
wtf
Similar Questions
  1. 1)An interest rate is a special type of?a. loan b. price c. bank d. service 2) How does a compound interest rate differ from a
    1. answers icon 14 answers
    1. answers icon 1 answer
    1. answers icon 1 answer
  2. An interest rate is a special type of (1 point)loan. **price. bank. service. 2. How does a compound interest rate differ from a
    1. answers icon 3 answers
more similar questions