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

Name: If a bank compounds savings accounts quarterly, the nominal rate will exceed the effective annual rate.
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Quizplus · Accepted Answer

Compounding quarterly means that the interest is added to the account balance every three months. This results in more frequent compounding and a higher effective annual rate than the nominal rate.

If a Bank Compounds Savings Accounts Quarterly, the Nominal Rate