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A nominal interest rate of 10% per year, compounded monthly, is most closely:   1% per...

A nominal interest rate of 10% per year, compounded monthly, is most closely:

  1% per month
  5.11% per six months
  10% per year
  4.98% per six months
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Answer #1

Interest rate 10%


per month interest 0.008333333


compounded montly per year interest rate 1.104713067-1 = 0.104713 = 10.47%


compounded montly six months interest rate 1.051053313 - 1 = 0.051053 = 5.105331 %


So option 2 is the answer 5.11% per six months

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