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29 July, 01:48

The annual interest rate of Mike's savings account is 4.8%, and simple interest is calculated monthly. What is the periodic interest rate of Mike's account?

A. 0.6%

B. 0.9%

C. 1.8%

D. 0.4%

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Answers (1)
  1. 29 July, 02:09
    0
    (1+r) = (1+i/12) ^12

    1+0.048 = (1+i/12) ^12

    Solve for I

    I = ((1.048) ^ (1:12) - 1) * 12

    I=0.047*100=4.7%
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