If you earn 0.5 percent a month in your bank account,this would be the same as earning a 6 percent annual interest rate with annual compounding.

Name: If you earn 0.5 percent a month in your bank account,this would be the same as earning a 6 percent annual interest rate with annual compounding.
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Earning 0.5 percent a month would actually result in a higher annual interest rate than 6 percent due to the effects of monthly compounding. The annual rate would be approximately 6.17 percent.

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