Question

What rate of interest is equivalent to 10% yearly under monthly compounding?

Answer 1

Nominal Interest rate = 10%

Calculating Effective Annual Rate:-

Where,

r = Nominal Interest rate = 10%

m = no of times compounding in a year = 12 (compounded monthly)

EAR = 1.104713 - 1

EAR = 10.47%

So, rate of interest is equivalent to 10% yearly under monthly compounding is 10.47%

If you need any clarification, you can ask in comments.    

If you like my answer, then please up-vote as it will be motivating