Calculate the annual effective interest rate of a 12 % nominal annual interest rate compound monthly

12.683%

Step-by-step explanation:

The effective annual rate is given by ...

(1 + r/n) ^n - 1

where r is the nominal annual rate, and n is the number of compoundings per year. Filling in the given numbers, we have ...

effective rate = (1 + 0.12/12) ^12 - 1 ≈ 0.12683 = 12.683%