Im having trouble with a couple questions Please show work s

I\'m having trouble with a couple questions. Please show work so I can understand. Thanks!

If a bank gives you an interest rate of 6% per year compounded monthly, what is the effective rate that your account is earning per year? o 6.0% 0 6.0564% 0 6.1678% O 6.2563%

Solution

EAR=(1+APR/m)^m-1
where m=compounding periods

1.Effective rate=(1+0.06/12)^12-1

=(1.005)^12-1

=6.1678%(Approx).

2.

Rate paid=(1+0.21/52)^52-1[weeks in a year =52]

=(1.004038462)^52-1

=23.31%(Approx)