SOLUTION: Find the effective rate of interest. 50.11% compounded daily a. 50.233% b. 51.015% c. 50.315% d. 64.997%

Algebra ->  Finance -> SOLUTION: Find the effective rate of interest. 50.11% compounded daily a. 50.233% b. 51.015% c. 50.315% d. 64.997%      Log On


   

Question 1046609: Find the effective rate of interest.
50.11% compounded daily
a. 50.233%
b. 51.015%
c. 50.315%
d. 64.997%
Answer by MathLover1(20850) About Me  (Show Source):
You can put this solution on YOUR website!

50.11% is the "nominal" rate of interest. It's compounded daily. To find the effective rate, you need to find the accumulation+factor for 1 year.
That would be %281+%2B+0.5011%2F365%29%5E365+=+1.649968736=+1.64997.
So the effective rate is 64.997%, and your answer is
d. 64.997%