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.

Question

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.

wolf1728 · Answer

Formula here: SInce we are just computing the interst rate we only need Interest rate = (1 + rate/n)^n n is the number of compounding periods Interest rate = (1 + (.041/4)^4 Interest rate = 1.0417793008 Compounded rate = 4.17793% which rounds to 4.178% Formula is here: http://www.1728.org/compint3.htm

anonymous · Answer

Great thank you so much for your help!

wolf1728 · Answer

u r welcome
:-)
I should have rounded that to 4.18%

anonymous · Answer

lol that's okay I would have figured that one out. :-)That link is definitely going to help me with some other problems. I appreciate it.

wolf1728 · Answer

thank you very much
:-)

anonymous · Answer

You are welcome and thanks again!

wolf1728 · Answer

thanks :-)