Your bank account pays an 8% nominal rate of interest. The interest is compounded quarterly. Which of the following statements is CORRECT?
A) the periodic rate of interest is 8% and the effective rate of interest is also 8%.
B) the periodic rate of interest is 2% and the effective rate of interest is 4%.
C) the periodic rate of interest is 8% and the effective rate of interest is greater than 8%.
D) the periodic rate of interest is 4% and the effective rate of interest is less than 8%.
E) the periodic rate of interest is 2% and the effective rate of interest is greater than 8%.
Correct Answer:
Verified
Q42: Which of the following statements is CORRECT?
A)
Q43: What's the future value of $1,200 after
Q43: Your bank account pays a 5% nominal
Q44: Which of the following bank accounts has
Q44: If we are given a periodic interest
Q47: What's the present value of $4,500 discounted
Q50: What's the future value of $1,500 after
Q50: A U.S. Treasury bond will pay a
Q51: A U.S. Treasury bond will pay a
Q58: If we are given a periodic interest
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents