Technically (1 + (x/12))^12 != (1 + x) In this case where x = 1% (or .01) they're so close it almost doesn't matter. For x = 10% it's a lot clearer. That said

Technically (1 + (x/12))^12 != (1 + x) In this case where x = 1% (or .01) they're so close it almost doesn't matter. For x = 10% it's a lot clearer. That said, it's also not equal to (1 + y) ^ 12, where y is whatever value is needed to have (1 + y) ^ 12 = 1 + x.