Converting AER to a Monthly Rate (Leaving Cert Mathematics): Revision Notes

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Converting AER to a Monthly Rate

In some cases AER may need to be converted monthly or weekly. There are 12 months in a year and 52 weeks.

Monthly Rate=(1+AER)112−1\text{Monthly Rate}=(1+\text{AER})^\tfrac{1}{12}-1 Weekly Rate=(1+AER)152−1\text{Weekly Rate}=(1+\text{AER})^\tfrac{1}{52}-1

Example

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Find the monthly compound interest rate which is equivalent to an AER of 4%4 \%.

(1+0.04)112−1=:success[0.327%](1+0.04)^\tfrac{1}{12}-1=:success[0.327 \%]

Example

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Find the weekly compound interest rate which is equivalent to an AER of 4%4 \%.

(1+0.04)152−1=:success[0.0755%](1+0.04)^\tfrac{1}{52}-1=:success[0.0755\%]

Explore Leaving Cert Mathematics Model Answers by Topics

Fundamentals of Arithmetic

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Explore Leaving Cert Mathematics Quizzes by Topics

Fundamentals of Arithmetic

The Basics

Income Tax

Compound Interest & Depreciation

Applications of Geometric Series

Amortisation Formula

Explore Leaving Cert Mathematics Flashcards by Topics

Fundamentals of Arithmetic

The Basics

Income Tax

Compound Interest & Depreciation

Applications of Geometric Series

Amortisation Formula

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