Question

An account earns 10% annual compound interest. The amount in the account after t years is equal to the principal times the expression (1 + 0.10)^t, or 1.10^t. To the nearest tenth of a percent, what is the monthly compound interest rate?

Answer 1

The annual multiplier is 1.10, so the monthly multiplier is
(1.10)^(1/12) ≈ 1.00797414
Then the monthly interest the account earns is 0.797414%, or ...
about 9.6% expressed as an annual rate compounded monthly.