12. Non annual compounding period The number of compounding periods in one year is called compounding frequency. The compounding frequency affects both the present and future values of cash flows. An investor can invest money with a particular bank and earn a stated interest rate of 11.00%; however, interest will be compounded quarterly. What are the nominal (or stated), periodic, and effective interest rates for this investment opportunity? Interest Rates Nominal rate Periodic rate Effective annual rate Van needs a loan and is speaking to several lending agencies about their interest rates and loan terms. He particularly likes his local bank because he is being offered nominal rate of 10.00%. However, since the bank is compounding its interest semiannually, the loan will impose an effective interest rate of on his loan. Suppose you decide to deposit $24,000 into a savings account that pays a nominal rate of 13.00%, but interest is compounded daily. Based on a 365- day year, how much would you have in your account after six months? (Hint: To calculate the number of days, divide the number of months by 12 and multiply by 365.) O $25,098.54 O $25,354.64 O $25,610.75 O $26,122.97 Kyoko had a high monthly food bill before she decided to cook at home every day in order to reduce her expenses. She starts to save $550 every year and plans to renovate her kitchen. She deposits the money in her savings account at the end of each year and earns 7% annual interest. Kyoko's savings are an example of an annuity. If Kyoko decides to renovate her kitchen, how much would she have in her savings account at the end of 4 years, rounded to the nearest whole dollar? O $3,297 $2,076 O $2,442 O $2,613 If Kyoko deposits the money at the beginning of every year and everything else remains the same, she will save by the end of 4 years