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Juli2301 [7.4K]
2 years ago
6

When calculating a loan’s effective rate, if the interest compounds every two months, what value of n do you plug into your eq

uation? a. 2 b. 0. 167 c. 6 d. 60.
Business
1 answer:
maks197457 [2]2 years ago
5 0

When calculating a <u>loan's effective rate</u> and interest compounds <u>every two months </u>then the<em> value of n</em> would be 6.

In a year there are 12 months and when the interest rate is said to be compounded in every two months then it implies that the <u>number of months </u>would be <em>6 months. </em>

<em />

Thus, the calculation of<u> compounded interest</u> would be derived with the following formula:

A=P(1+\frac{r}{m} )^{mt}

Learn more about the effective rate of interest here:

brainly.com/question/26077394

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