Calculate the annual effective interest rate of a 12 % nominal annual interest rate compound monthly
1 answer:
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First find out the function for the given table.
Find the slope.
m= (y2-y1)/(x2-x1)
m=(-1-(-3)) / (-1-(-2))
m=(-1+3) / (-1+2)
m=2/1
m=2
Now equation of line:
y-y1=m(x-x1)
y-(-3)=2(x-(-2))
y+3=2(x+2)
y+3=2x+4
y=2x+1
Now plot these points on the graph, we get the attached graph.
Find the slope.
m= (y2-y1)/(x2-x1)
m=(-1-(-3)) / (-1-(-2))
m=(-1+3) / (-1+2)
m=2/1
m=2
Now equation of line:
y-y1=m(x-x1)
y-(-3)=2(x-(-2))
y+3=2(x+2)
y+3=2x+4
y=2x+1
Now plot these points on the graph, we get the attached graph.