Which of the following may not be equal to the contract rate of interest?
A)stated rate
B)nominal rate
C)face rate
D)effective rate

Question

Quizplus · Accepted Answer

The effective rate takes into account the compounding of interest, whereas the contract rate may not reflect this. Therefore, the effective rate may be higher or lower than the contract rate. The stated rate, nominal rate, and face rate are all synonyms for the contract rate and are equivalent.

Which of the Following May Not Be Equal to the Contract