Final answer:
To convert a nominal rate of 11.15% compounded semi-annually to a nominal rate compounded monthly, the monthly rate is 0.9155% and the effective rate is 11.6890%.
Step-by-step explanation:
To convert a nominal rate of 11.15% compounded semi-annually to a nominal rate compounded monthly, we can use the formula:
Monthly Rate = (1 + Semi-Annual Rate)⁽¹/₆₎ - 1
Plugging in the values, we get:
Monthly Rate = (1 + 0.1115)⁽¹/₆₎ - 1 = 0.009155
So the nominal rate compounded monthly is 0.9155%. To find the effective rate, we can use the formula:
Effective Rate = (1 + Monthly Rate)¹² - 1
Plugging in the value, we get:
Effective Rate = (1 + 0.009155)¹² - 1 = 0.116890
So the effective rate is 11.6890%.