EFFECTIVE ANNUAL RATES Bank A offers loans at an 8% nominal rate (its APR) but requires that
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EFFECTIVE ANNUAL RATES Bank A offers loans at an 8% nominal rate (its APR)
but requires that interest be paid quarterly; that is, it uses quarterly compounding.
Bank B wants to charge the same effective rate on its loans but it wants to collect interest on a monthly basis, that is, to use monthly compounding. What nominal rate must Bank B set?
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Related Book For 
Fundamentals Of Financial Management Concise Edition
ISBN: 9781285065137
8th Edition
Authors: Eugene F. Brigham, Joel F. Houston
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