A nominal interest rate of “12% per year compounded yearly” is closest to: (a) 1% per month effective rate (b) 3% per quarter effective rate (c) 6% per 6 months effective rate (d) 12% per year effective rate

A nominal interest rate of “12% per year compounded yearly” is closest to: (a) 1% per month effective rate (b) 3% per quarter effective rate (c) 6% per 6 months effective rate (d) 12% per year effective rate

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

A nominal interest rate of “12% per year compounded yearly” is closest to:

(a) 1% per month effective rate

(b) 3% per quarter effective rate

(d) 12% per year effective rate

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