Find the effective rate of interest for 1010​% compounded monthly.

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Answer 1

1010% interest is a LITTLE too high for reality; let's use 10%

A = P(1+0.10/12)¹² represents the amount Accumulated.

Calculate A, assuming that P = 1 ($).

A-1 is the total interest in 12 months. Convert this small decimal number to % -- that's the "APR" or effective rate of simple interest.