Which one of the following has the highest effective annual rate? A. 6 percent compounded monthly. B. 6 percent compounded quarterly. C. 6 percent compounded semiannually

Q: .If $1000 is deposited at 12.5% p.a. for one year, what is the effective annual interest rate if…

A: Given, The amount deposited is $1000 The annual rate is 12.5%

Q: Determine the nominal rate of interest compounded quarterly which is equivalent to 6.3% compounded…

A: The nominal interest rate refers to the periodic interest rate multiplied by the number of periods…

Q: deferred perpetuity-due begins payments at time n with annual payments of $1,000 per year. If the…

A: In perpetuity, there are payments forever and continue for indefinite periods and deferral periods…

Q: Calculate the annual effective rate equivalent to a nominal rate of 8.84% compounded quarterly.…

A: Given: Nominal rate for quarterly compounding = 8.84% Annual effective rate = (1 + rq/ n)n -1 where…

Q: What is the effective annual rate (EAR) for a nominal rate (monthly compounding) of 9.00%? 9.4130%…

A: Nominal rate = 9% Compounding = monthly

Q: Find the nominal annual rate of interest compounded semi-annually that is equivalent to 5.5%…

A: Compounding refers to the effect of the frequency of receiving interest on the total value of the…

Q: What is the equivalent rate of 10% compounded semi-annually to compounded bi-monthly? 9.8378% O…

A: Note : It has been assumed that bi monthly means something which happens once in two months and…

Q: Find the APY corresponding to the following nominal rate. 9% compounded quarterly The APY is %.…

A: APY stands for annual percentage yield. Formula for APY= (1+rn)n -1 where r= rate n= number of…

Q: Determine how much is in each account on the basis of the indicated compounding after the specified…

A: initial Principal Value is 7200 The interest rate is 2.5% The time period is 1 year To Find:…

Q: What is the effective rate (annually compounded rate) of interest corresponding to 9% compounded…

A: The effective annual rate (EAR) is the actual rate of interest that an investment earns over a year,…

Q: Determine the effective rate for $1 invested for 1 year at 7.8% compounded quarterly. The effective…

A: The effective interest rate can be defined as the interset that will be computed using the nominal…

Q: Which one of the following represents the highest effective interest rate per yea

A: Here we will have to convert each option to its EAR i.e. effective annual rate. The compounding…

Q: What is the present worth of the followingseries of payments?(a) $5,000 at the end of each six-month…

A: Periodic Payment = 5000 Semi Annual Compounding, Hence: Time Period = 12 years * 2 = 24 semi annual…

Q: Determine the number of compounding periods (n) using the information in the graph below: Time of…

A: Compounding frequency = Semi-AnnuallyInterest rate per year = 18.20%Annuity length = 13 years

Effective Interest Rate

The term interest rate can be defined as the amount that is charged by the lender as a percentage on the principal amount. Interest rate which is charged annually is known as annual percentage rate.