To determine the interest paid each compounding period,we take the advertised annual percentage rate and simply divide it by the ________ to get the appropriate periodic interest rate.
A)number of compounding periods for the length of an investment
B)number of discounting periods for the length of an investment
C)number of compounding periods per year
D)number of compounding periods per month

Question

Quizplus · Accepted Answer

The interest paid each compounding period is determined by the periodic interest rate, which is based on the number of compounding periods per year. Therefore, we need to divide the annual percentage rate (APR) by the number of compounding periods per year to get the appropriate periodic interest rate.

To Determine the Interest Paid Each Compounding Period,we Take the Advertised