Answer:
12.73%
Step-by-step explanation:
Given the annual rate is 12% compounded weekly.
Let's assume 1 yr=52weeks.
The effective interest rate is calculated as:
[tex]i_m=(1+r/m)^m-1, r=annual\ rate\\\\i_{52}=(1+0.12/52)^{52}-1\\\\i_{52}=0.1273[/tex]
Hence, the effective rate for 12% compounded weekly is 12.73%
-The effective rate will be different when the number of compounding times is less than or more than 1 year.
- the effective rate is equal to the stated rate if the compounding number of times is once per year.
