If we are given a periodic interest rate, say a monthly rate, we can find the nominal annual rate by dividing the periodic rate by the number of periods per year.

Name: If we are given a periodic interest rate, say a monthly rate, we can find the nominal annual rate by dividing the periodic rate by the number of periods per year.
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Question

Quizplus · Accepted Answer

To find the nominal annual rate from a periodic interest rate, you multiply the periodic rate by the number of periods per year, not divide.

If We Are Given a Periodic Interest Rate, Say a Monthly