Answer:
Step-by-step explanation:
The rate is given by the following formula
[tex]r=(1+\frac{i}{n} )^{n}-1[/tex]
Where
[tex]r[/tex] is the rate
[tex]i[/tex] is the interest in decimals
[tex]n[/tex] is the number of compounded periods
Replacing each value, we have
[tex]r=(1+\frac{0.025}{12} )^{12}-1=(1+0.0021)^{12}-1=(1.0021)^{12} -1=0.0255[/tex]
Then, we express the rate in percentage: [tex]0.0255 \times 100 = 2.55 \%[/tex]
Therefore, the right answer is D. 2.55%.
