Answer:
20.65%
Step-by-step explanation:
Formula to calculate effective interest rate :
Effective interest rate [tex]=(1+\frac{r}{n})^n-1[/tex]
where r = Rate of interest = 18.78% = 0.1878
n = number of compounding period = 365
Now put the values into formula
[tex]=(1+\frac{0.1878}{365})^365-1[/tex]
[tex]=(1+0.000515)^{365}-1[/tex]
[tex]=1.000515^{365}-1[/tex]
= 1.206534 - 1
= 0.206534
= 20.65%
Last year Effective interest rate was 20.65%.
