Ok im really stuck on this problem and am looking for help +k will most definitely be given. Here is the word problem.
A loan is made at a simple interest rate of 5%
a)in which period is this equivalent to an effective rate of 1/23 (compound interest, im assuming)
b)what is the effective interest rate for the period [4,6]
Part A I have the problem simplified (I think) and I may just be stuck with the algebra, however im not 100% sure im correct. Right now I'm at (1+.05t)=(1+1/23)^t and solving for T should most likely give me the answer.
Part B I believe I just take the total simple interest at t=6 which is 1.3 and subtract total simple interest from time 4 which is 1.2 and divide by 1.2 (1.3-1.2)/1.2 to give the effective interest rate for the period (.0833333)
Any help would be greatly appreciated