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%

Question

2 March, 17:47

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Answers (1)

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Mylee Spears · Answer 1

(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%

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%