ENTREPRENEURIAL PLANNING
BUSINESS PLAN DEVELOPMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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8%
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12%
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3%
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5%
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Detailed explanation-1: -"12% interest compounded monthly” means that the interest rate is 12% per year (not 12% per month), compounded monthly. Thus, the interest rate is 1% (12% / 12) per month.
Detailed explanation-2: -Simply divide your APY by 12 (for each month of the year) to find the percent interest your account earns per month. For example: A 12% APY would give you a 1% monthly interest rate (12 divided by 12 is 1). A 1% APY would give you a 0.083% monthly interest rate (1 divided by 12 is 0.083).
Detailed explanation-3: -How do you calculate interest per year? The equation for calculating interest rates is as follows: Interest = P x R x N. Where P equals the principal amount (the beginning balance), and R stands for the interest rate (usually per year, expressed as a decimal).