Question: How do I calculate the monthly effective rate? You plan to put $1,000 in a saving plan per MONTH (end of month) for 2 years.

How do I calculate the monthly effective rate?

You plan to put $1,000 in a saving plan per MONTH (end of month) for 2 years. Compute the present value (PV) of the plan with each of the following options?

a) Receive 12% stated (nominal) annual interest rate, interst is compounded monthly.

b) Receive 12.5% stated (nominal) annual interest rate, interest is compounded annually.

c) Receive 11.5% stated (nominal) annual interest rate, interest is compounded daily.

d) Receive 12% nominal anuual interest rate, interest is compounded quarterly.

e) Receive 12.5% nominal interest rate, interest is compounded continuously.

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