Question
A bank quotes an interest rate of 12% pa with monthly compounding. Note that another way of stating this rate is that it is an
-
A bank quotes an interest rate of 12% pa with monthly compounding. Note that another way of stating this rate is that it is an annual percentage rate (APR) compounding every month. Which of the following statements about this rate is NOT correct? All percentages are given to 5 decimal places. a. The annual percentage rate (APR) compounding semi-annually is 12.30403%. b. Continuously compounded quarterly rate is 2.98510% per quarter. c. Continuously compounded monthly rate is 0.89958% per month. d. Effective semi-annual rate is 6.15202% per semi-annual. e. Effective monthly rate is 1.00000% per month.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Financial Management Theory And Practice
Authors: Prasanna Chandra
8th Edition
0071078401, 978-0071078405
