57. Effective Rates. First National Bank pays 6.2 percent interest compounded semiannually.
Second National Bank pays 6 percent interest, compounded monthly. Which bank offers the higher effective annual rate?
We will use the following formula:
EIR= (1+i/m)^m*n -1
EIR= Effective Interest rate, m= number of ...
The solution provides the steps to calculate the effective annual rate.