Engineering Board Exam Reviewer · Nominal and Effective Rate of Interest · medium
Find the nominal rate compounded monthly that is equivalent to an effective rate of 12.68%.
- 12%
- 12.68%
- 11.5%
- 13%
Answer
A. 12%
Solution
(1+i)12-1=0.1268 1+i 1.01 i=0.01, so the nominal rate =12i=12%.
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