An annual percentage rate must be converted to the appropriate periodic rate when compounding is more frequent than once a year.

Name: An annual percentage rate must be converted to the appropriate periodic rate when compounding is more frequent than once a year.
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Question

Quizplus · Accepted Answer

Compounding interest more frequently than once a year can lead to different effective interest rates, so the APR must be converted to the appropriate periodic rate to accurately compare different loan or savings options.

An Annual Percentage Rate Must Be Converted to the Appropriate