Question

Naomi deposited money into savings account that is compunded quarterly at an interest rate of 6%. She thinks this quarterly rate is the same as a monthly interest rate of 1.25%, Is Naomi right? If so, explain why and show how you got your answer. Is Naomi incorrect? If so, explain the mistake in her reasoning, give the correct monthly interest rate, and show how you got your answer. 80 pts for whoever answer this the best plzz

Answer 1

Answer:

No, because 1.25% times 3 is 3.75% which is less than 6%

Step-by-step explanation:

Quarterly is every 3 months

6% interest is 1.06, 6 cents on the dollar

Monthly interest rate is 1.25% so 1.25 × 3 is 3.75

So, 1.25% times 3 is 3.75% which is 2.25% less than 6%

Hope this helps!

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