Chapter 4 - Exponential Functions - 4.4 Applications to Compound Interest - Exercises and Problems for Section 4.4 - Exercises and Problems - Page 167: 6

a) $1.3 \%$ b) $1.31 \%$

(a) The interest rate per year is $0.013 / 1$. Therefore, the effective interest rate is $$i= \left(1+\frac{0.013}{1}\right)^{1}-1= 1.3\%$$ (b) The interest rate per month is $0.013 / 12$. Therefore, the effective interest rate is $$i= \left(1+\frac{0.013}{12}\right)^{12}-1\approx 1.31\%$$