Question: You are considering opening a saving account at a local bank, which seems to be offering a good rate on one of their accounts. The

You are considering opening a saving account at a local bank, which seems to be offering a good rate on one of their accounts. The account would pay interest monthly. You work out that if you put $1250 in this account, you would have $1385 in your account at the end of the year. What would the advertised rate on this account be?

a. 10.300% p.a. compounding monthly

b. 5.3000% p.a. compounding monthly

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