## Precalculus: Concepts Through Functions, A Unit Circle Approach to Trigonometry (3rd Edition)

$6.168 \%$
Recall: Effective Rate of Interest Formula $$r_e = \left(1+\dfrac{r}{n} \right)^n - 1$$ where $r_e:$ Effective Rate of Interest $r:$ Annual Interest Rate $n:$ Number of compoundings per year The given problem has: $r = 0.06$ $\text{Compounded monthly} \to n = 12$ Thus, using these valules and the formula above gives: $r_e = \left(1+\dfrac{0.06}{12} \right)^{12} - 1$ $r_e \approx 0.06168$ $r_e \approx 6.168 \%$