Annual Interest Rate divided by 12= Monthly Interest Rate
I suspect that it will be 6.3!
If not compounded monthly, a monthly interest rate is simply 1/12 of the annual rate. Things do get complicated, though if the interest is compounded monthly. An annual interest rate of R% is equivalent to a monthly rate of 100*[(1 + R/100)^(1/12) - 1] %
22. The spot Yen/US$ exchange rate is Yen119.795/US$ and the one year forward rate is Yen114.571/US$. If the annual interest rate on dollar CDs is 6%, what would you expect the annual interest rate to be on Yen CDs?
1.5% monthly
Let i = annual rate of interest. Then i' = ((1+i )^(1/12))-1 Where i' = monthly rate of interest
Annual Interest Rate divided by 12= Monthly Interest Rate
Devon has a lil dick
The true annual rate of charged interest is called the annual percentage yield. It is the interest charged and compounded against.
I suspect that it will be 6.3!
An effective annual interest rate considers compounding. When the principle is compounded multiple times each year the interest rate increased to be more than the stated interest rate. The increased interest rate is the effective annual interest rate.
If not compounded monthly, a monthly interest rate is simply 1/12 of the annual rate. Things do get complicated, though if the interest is compounded monthly. An annual interest rate of R% is equivalent to a monthly rate of 100*[(1 + R/100)^(1/12) - 1] %
22. The spot Yen/US$ exchange rate is Yen119.795/US$ and the one year forward rate is Yen114.571/US$. If the annual interest rate on dollar CDs is 6%, what would you expect the annual interest rate to be on Yen CDs?
1.5% monthly
If you have an annual interest rate then is 10.405%
annual percentage rate
Multiply the monthly interest rate by the number of months is a year to calculate the annual interest rate: 2% x 12mo = 24%