<PRE><B>Question 893044</B>
Find the effective rate corresponding to nominal rate 6% I year compounded monthly. Round the answers to the nearest hundredth of percent.
------------------
A(t) = P(1+(r/n))^(nt)
------
Your Problem::
A(t) = P(1+(0.06/12))^(12*1)
----
Effective rate = (1+0.005)^12 - 1
= 0.061678
= 6.168%
=============
Cheers,
Stan H.
----------------- 
A) 6.538% 
B) 5.858% 
C) 6.598% 
D) 6.168% 
</PRE>