a bank compounds savings accounts quarterly, the effective annual rate will exceed the nominal rate.

Name: a bank compounds savings accounts quarterly, the effective annual rate will exceed the nominal rate.
Brand: Quizplus
Rating: 4.7 (30 reviews)

Question

Quizplus · Accepted Answer

When a bank compounds savings accounts quarterly, it means that the interest is added to the account four times a year. This results in the effective annual rate being higher than the nominal rate, as interest is earned on the interest earned in each quarter. Therefore, the answer is true.

A Bank Compounds Savings Accounts Quarterly, the Effective Annual Rate