Answer :
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SOLUTION
[tex]\begin{gathered} Effective\text{ Annual Rate=\lparen1+}\frac{i}{n}\text{\rparen}^n-1 \\ i=stated\text{ annual rate=11.5\%=0.115} \\ n=number\text{ of compounded periods=12} \end{gathered}[/tex]Substitution and simplification;
[tex]Effective\text{ Annual Rate=\lparen1+}\frac{0.115}{12}\text{\rparen}^{12}-1=12.126\text{ \% }[/tex]