SOLUTION: The interest rate charged by various banks that operate credit card System is 1.5 per month. 1) what is the nominal interest rate? 2) what is the effective annul interest rate?

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Question 1062183: The interest rate charged by various banks that operate credit card System is 1.5 per month.
1) what is the nominal interest rate?
2) what is the effective annul interest rate?
3) how many years will it take an investment to double itself if the interest is compounded monthly?
4)how many years will it take an investment to double itself if the nominal rate is compounded continuously?
Answer by solver91311(24713) About Me  (Show Source):
You can put this solution on YOUR website!


If interest rate (expressed as a decimal) is compounded monthly, then when the principal has doubled, .

So if the investment takes years to double:












If compounded continuously:











John

My calculator said it, I believe it, that settles it