The most common payment schedule calls for monthly payments; thus,before using the quoted APR,you must convert the quoted APR into ________ rate per month.
A) compound
B) nominal
C) mortgage
D) equivalent effective

Question

Quizplus · Accepted Answer

The equivalent effective rate per month takes into account the compounding effect of interest over a monthly payment schedule. The nominal rate refers to the stated rate of interest, and the mortgage rate is specific to mortgage loans. Compound rate refers to the rate at which interest is added to the principal amount, but does not take into account the monthly payment schedule.

The Most Common Payment Schedule Calls for Monthly Payments; Thus,before