Question

What is the annual rate of interest earned on a savings account that compounds monthly at a rate of 1.75%?

A.) 1.40%


B.) 1.45%


C.) 1.75%


D.) 1.76%

Answer 1

1.76

Explanation:

Answer 2

Answer: Option 'B' is correct.

Explanation:

Since we have given that

Compounded monthly rate = 1.75% = 0.175

We need to find the annual rate of interest.

As we know that

Annual rate = 12 months

So, it will be divided by 12 to get the annual rates.

So, Annual rate would be

`(0.175)/(12)=0.01458\\\\=0.01458* 100\%\\\\=1.45\%`

Hence, Option 'B' is correct.