Find the effective rate which is equivalent to nominal rate of 10% p.a. compounded monthly.
you might start here ...
www.calculatorsoup.com/calculators/financial/nominal-interest-rate-calculator.php
I got 0.104
@oobleck plse see is it right or wrong
let the effective annual rate be i
so
(1+i)^1 = (1 + .10/12)^12
1+i = 1.1047...
i = .1047 or ..... % per annum
To find the effective rate that is equivalent to a nominal rate of 10% per annum compounded monthly, you can use the formula for compound interest:
Effective Rate = (1 + (Nominal Rate / Number of Compounding Periods)) ^ Number of Compounding Periods - 1
In this case, the nominal rate is 10% per annum and compounded monthly. So, the number of compounding periods in a year is 12 (12 months).
Plugging the values into the formula:
Effective Rate = (1 + (0.10 / 12)) ^ 12 - 1
Calculating the expression inside the brackets:
Effective Rate = (1 + 0.0083333) ^ 12 - 1
Evaluating the expression:
Effective Rate = (1.0083333) ^ 12 - 1
Computing the power:
Effective Rate = 1.104713 - 1
Calculating the subtraction:
Effective Rate = 0.104713
So, the effective rate that is equivalent to a nominal rate of 10% per annum compounded monthly is approximately 10.47%.