Question

# 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

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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