College Algebra (10th Edition)

Published by Pearson
ISBN 10: 0321979478
ISBN 13: 978-0-32197-947-6

Chapter 9 - Section 9.2 - Arithmetic Sequences - 9.2 Assess Your Understanding - Page 656: 72


$\approx 16.42\%$

Work Step by Step

From section 6-7, we have a theorem: The effective rate of interest $r_{e}$ of an investment earning an annual interest rate $r$ is given by Compounding $n$ times per year: $r_{e}=\displaystyle \left(1+\frac{r}{n}\right)^{n}-1$ Continuous compounding: $\quad r_{e}=e^{r}-1$ Here, the compounding is monthly, so $ r_{e}=\displaystyle \left(1+\frac{0.153}{12}\right)^{12}-1\approx 0.1642\approx 16.42\%$
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