3 ms·
The effective interest rate should be calculated and then converted to the monthly rate: $$ \left( 1 + \frac{i_a}{n_a} \right)^{n_a} = \left( 1 + \frac{i_b}{n_
by jskherman 3y ago
The effective interest rate should be calculated and then converted to the monthly rate:
$$
\left( 1 + \frac{i_a}{n_a} \right)^{n_a} = \left( 1 + \frac{i_b}{n_b} \right)^{n_b} = \left( 1 + \frac{i_{\text{annual}} }{1} \right)^{1}
$$
https://www.investopedia.com/terms/e/effectiveinterest.asp https://www.investopedia.com/terms/e/effectiveinterest.asp