# Math Help - effective and nominal rate question

1. ## effective and nominal rate question

Bank A has an effective annual rate of 18%. Bank B has a nominal annual rate of 17%. What is the smallest whole number of times per year that Bank B must compound its interest in order that the rate at Bank B be at least as attractive as that at Bank A on an effective annual basis?

I have tried using the effective annual to nominal rate equation, equating the two and trying to solve for m but can not seem to get the answer.

2. Your approach is valid, although it may be difficult to isolate m algebraically.

$1.18 \leq \left( 1+\frac{0.17}{m} \right)^m$

I assume you rearranged that for m and got stuck. You know the answer is an integer so you can just use trial and error to find the smallest value of m that satisfies the inequality.