A client is confused about two terms .on some certificate of deposit rates quoted at his bank in Namibia. You explain that the stated annual interest rate is an annual rate that does not take into account compounding within a year. The rate his bank calls annual percentage yield (APY) is the effective annual interest rate taking into account compounding. The bank’s customer service representative mentioned monthly compounding, with a N$1 000 becoming N$1 061.68 at the end of a year.

Required:
As part of your preparations for a meeting with a client where you will explain these
terms, calculate the stated annual interest rate that the bank must be quoting.