## Precalculus (10th Edition)

$6.17\%$
The effective rate of interest ($r_e$), is given by the formula $r_e=(1+\frac{r}{n})^n-1$ where $r$ is the annual interst rate and $n$ is the number of compounding periods per year. Use the formula above to obtain: $r_e=\left(1+\frac{0.06}{12}\right)^{12}-1\\ r_e=1.06167781186-1\\ r_e=0.06167781186\\ r_e \approx 6.17\%$