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You invest $1000 in an account that has an annual interest rate of 4%, compounded monthly for 12 years. What is the equivalent interest rate and how many times will the money be compounded?

Sagot :

The equivalent interest rate is 4.07%.

The money will be compounded 12 times.

What is the equivalent interest rate?

The equivalent interest rate is the actual interest rate that an account earns after accounting for number of compounding.

Effective interest rate = (1 + APR / m ) ^m - 1

M = number of compounding

(1 + 0.04/12)^12 - 1 = 4.07%

To learn more about the effective interest rate, please check: https://brainly.com/question/4064975

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