Final answer:
To convert an annual effective interest rate to a nominal discount rate convertible monthly and an effective monthly discount rate, specific financial formulas must be employed to adjust the compounding periods.
Step-by-step explanation:
To find the equivalent nominal discount rate convertible monthly for an annual effective interest rate of 6.6%, we first need to establish the effective monthly interest rate. Once we have the monthly rate, we can find the nominal rate associated with the same effective annual rate when compounded monthly.
To find the effective monthly interest rate (imonthly), we use the formula (1 + annual_rate)1/12 - 1.
To calculate the monthly nominal discount rate convertible monthly (dnominal), we use the formula 12 * [(1 - (1 - monthly_rate)12)/(monthly_rate)].
Finally, the effective monthly discount rate is the monthly rate calculated from the annual effective rate, but reflected as a discount rather than as interest added. This is simply (1 - imonthly).