Crespo pg.85 defines that two equivalent rates, when applied to the same amount for the same period, produce the same amount. Crespo, Antonio. Mate...
Crespo pg.85 defines that two equivalent rates, when applied to the same amount for the same period, produce the same amount. Crespo, Antonio. Matemática financeira. São Paulo: Atlas, 2009. Julia is a manager of a financial institution that lends money to legal entities at a monthly interest rate of m. What is the equivalent annual interest rate in compound interest mentioned?
Crespo pg.85 defines that two equivalent rates, when applied to the same amount for the same period, produce the same amount. Julia is a manager of a financial institution that lends money to legal entities at a monthly interest rate of m. The question asks for the equivalent annual interest rate in compound interest. A. 1% a.a. B. 50,06% a.a. C. 2% a.a. D. 0,5% a.a. E. 50,36% a.a.
To find the equivalent annual interest rate, we need to consider the compounding period. Since the monthly interest rate is given, we'll assume that the compounding is also done monthly.
Let's denote the monthly interest rate as m. To find the equivalent annual interest rate, we can use the compound interest formula:
(1 + i)^n = (1 + m)^12
where i is the equivalent annual interest rate and n is the number of compounding periods in a year (which is 12 since we are compounding monthly).
Rearranging the formula to solve for i, we have:
i = [(1 + m)^12] - 1
Now we can substitute the value of m given in the question and calculate i:
i = [(1 + m)^12] - 1 i = [(1 + m)^12] - 1 i = [(1 + m)^12] - 1
Using a calculator, we can find the value of i. However, the given options are not provided, so we cannot provide the exact equivalent annual interest rate without additional information.
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