Question

Effective Rate of Interest is 12% p.a. compounded annually. Calculate the following
a. Semi annual rate of compounding b. Quarterly rate of compounding c. Monthly rate of compounding​

Answer 1

Plugging in our EAR of 6.09% and our n (number of periods) as 12, we get an equivalent nominal rate of 5.926%, or . 493862% per month (simply divide by 12). In other words, if a stated annual rate of 5.926% is compounded monthly then it equals an effective annual rate of 6.09%

Hope it helps u!

Answer 2

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ko poot Lee