00:01
Hello, welcome to this lesson.
00:03
In this lesson we are looking for the rate that compounds daily that will yield an effective rate of 3%.
00:10
So here we have the effective rate.
00:13
So we have effective rate which is the 3 % or 0 .03 and the formula for the effective rate.
00:27
The effective interest rate is giving us 1 plus the rate.
00:32
So here we have the n as 365 cos a compounds daily.
00:39
We have the number of compounding times as 365.
00:42
That's the number of days in a year.
00:46
So we have the effective rate which is 0 .03 and that is equals to 1 plus pi on n.
00:54
Now the n is 365.
00:57
365 on 365 again to the power 365 minus 1.
01:08
At this point we would add 1 to both sides.
01:12
We have 1 plus 0 .03.
01:15
Let's go to 1 plus the rate on 365.
01:20
We have 365 minus 1 plus 1.
01:26
So this is 1 .03 and that is equals to 1 plus r on 365.
01:34
This is 365.
01:37
And we have this and that...