Interest

Problem:



Solution:

a)
Monthly growth factor is $ 1 + \frac{0.05}{12} = 1.004166667 $
Annual growth rate is $ (1.004166667)^{12} = 1.051161898 $
Annual Percentage change is $ 1.051161898 - 1 = 0.051161898 = 5.116189788\% $

b)
Quarterly growth factor is $ 1 + \frac{0.067}{4} = 1.01675 $
Annual growth rate is $ (1.01675)^{4} = 1.068702251 $
Annual Percentage change is $ 1.068702251 - 1 = 0.068702251 = 6.87022514\% $

c)
Daily growth factor is $ 1 + \frac{0.032}{365} = 1.0000876712328800 $
Annual growth rate is $ (1.0000876712328800)^{365} = 1.0325160570374600 $
Annual Percentage change is $ 1.0325160570374600 - 1 = 0.0325160570374607 = 3.2516057037460700  \% $