Question

For each of the following accounts, determine the percent change per compounding period. Give your answer in both decimal and percentage form. Account A has a 3% APR compounded monthly. Determine the percent change per compounding period.
i. Decimal form _________.
ii. Percentage form % __________.

Answer 1

Answer:

i. 0.0025

ii. 0.25%

Step-by-step explanation:

Given,

In account A,

Annual percentage rate = 3%,

Here, the compounding period is calculated monthly,

We know that,

1 year = 12 months,

Thus, the compounding percentage rate = $\frac{\text{Annual rate}}{12}$

$=\frac{3}{12}$

$=0.25\%$

∵ 1% = 0.01

⇒ 0.25% = 0.0025

So, the monthly rate in decimal form = 0.0025