If money is invested for 8 years at a simple interest rate of 8.6% per annum,...

If money is invested for 8 years at a simple interest rate of 8.6% per annum, the nominal interest rate per annum, compounding monthly, is (as a percentage rounded to three decimal places; no % sign):

Solutions

Expert Solution

Let r be the rate compounded monthly

Hence,
(1+8.6%*8)=(1+r/12)^(12*8)
=>r=((1+8.6%*8)^(1/(12*8))-1)*12
=>r=6.5622%

jeff jeffy answered 1 year ago

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