if the annual interest rate is 12%, what is the monthly interest rate? (1 point) 1% 1.2% 12% 144%
if the annual interest rate is 12%, what is the monthly interest rate? (1 point) 1% 1.2% 12% 144%
Answer
Explanation:
Step1: Recall the relationship between annual and monthly rates
To find the monthly interest rate, we divide the annual interest rate by the number of months in a year (12), since the annual rate is the total rate over 12 months. The formula is: (\text{Monthly Rate} = \frac{\text{Annual Rate}}{12})
Step2: Substitute the given annual rate
Given the annual interest rate is (12%), we substitute into the formula: (\text{Monthly Rate} = \frac{12%}{12})
Step3: Perform the division
(\frac{12%}{12}= 1%)
Answer:
1% (corresponding to the option "1%")