An interest rate of 4.6% per annum is equivalent to an interest rate of1.15% per quarter0.35% per month0.17% per week0.17% per fortnight$0.39% per month
Question
An interest rate of 4.6% per annum is equivalent to:
- 1.15% per quarter
- 0.35% per month
- 0.17% per week
- 0.17% per fortnight
- $0.39% per month
Solution
The statement seems to be a bit confusing, but I'll try to clarify it.
An annual interest rate of 4.6% does not directly convert to the other rates mentioned without some form of compounding taken into account.
- If we simply divide the annual rate by 4 (for 4 quarters in a year), we get 1.15% per quarter.
- If we divide the annual rate by 12 (for 12 months in a year), we get approximately 0.383% per month, not 0.35%.
- If we divide the annual rate by 52 (for 52 weeks in a year), we get approximately 0.088% per week, not 0.17%.
- If we divide the annual rate by 26 (for 26 fortnights in a year), we get approximately 0.177% per fortnight, not 0.17%.
- The last statement seems to be a repetition of the monthly rate, but with a different value. As mentioned before, the monthly rate would be approximately 0.383%, not 0.39%.
Please note that these calculations are based on simple interest, not compound interest. The rates would be different if the interest is compounded quarterly, monthly, weekly, or fortnightly.
Similar Questions
The effective annual rate of interest corresponding to a nominal rate of 6% per annum payable half-yearly is:A)6.06%B)6.07%C)6.0B%D)6.09%
Alfred wants to invest N4,000 at 6% simple interest rate for 5 years. How much interest will he receive?
At what rate of interest per annum will Rs. 3000 amount to Rs. 3630 in 2 years, if the interest is compounded annually? Options 5% 12% 11% 10%
Stefanhas$29,488inasavingsaccountthatearns13%interestperyear.Theinterestisnotcompounded.Tothenearestcent,howmuchinterestwillheearnin6months?
What is the nominal rate per annum when interest is payable half-yearly that would be given an effective rate of 10% per annum?
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.