Final answer:
The interest rate of 1% per month is equivalent to approximately 12.68% per year compounded monthly, which applies to all of the given options.
Step-by-step explanation:
The interest rate of 1% per month can be converted to an equivalent annual rate compounded monthly by using the formula:
Annual Interest Rate = (1 + Monthly Interest Rate)^12 - 1
So, let's calculate the equivalent annual interest rate for each given option:
a) Nominal 3% per quarter compounded monthly:
Monthly Interest Rate = 3% / 3 = 1% = 0.01
Annual Interest Rate = (1 + 0.01)^12 - 1 = 12.68% (approximately)
b) Effective 12.683% per year compounded monthly:
This option is already the equivalent annual interest rate.
c) Nominal 12% per year compounded monthly:
Monthly Interest Rate = 12% / 12 = 1% = 0.01
Annual Interest Rate = (1 + 0.01)^12 - 1 = 12.68% (approximately)
Based on the calculations, options a, b, and c all have an equivalent annual interest rate of approximately 12.68%. Therefore, the correct answer is d) all of the above.