If a bank pays a 4.5% nominal rate, with monthly compounding on deposits, what effective rate (EFF) does this bank pay? I took:r = 4.5m = 12 monthsi = r/m = 4.5/12 = .375isuba = (1+i)power of m -1isuba = (1+.375) power of 12 -1(1.375) power of 12 -1= 45.67What am I doing wrong??
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