You invest 1000$ Annual interest rate 4% compounded monthly for 12 months what is the equivalent interest rate how many times will it be compounded

Question

What is the equivalent interest rate and how many times will it be compounded? 

Answer 1

Compute the amount to which the original one thousand dollars grows, compounded monthly for one year at 4%.

Subtract the original $1,000.

The difference thus computed is the amount of interest earned.

Divide it by ten to compute total interest that $100 earned.

 

This last result is the EFFECTIVE rate of interest that you'd earn in 1 year, simple interest.

NO compounding during the one year.