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.
Effective monthly rate is 1.00000% per month.
b.
Continuously compounded quarterly rate is 2.98510% per quarter.
c.
Effective semi-annual rate is 6.15202% per semi-annual.
d.
Continuously compounded monthly rate is 0.89958% per month.
e.
The annual percentage rate (APR) compounding semi-annually is 12.30403%.
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Quantum Economics And Finance
Authors: David Orrell
3rd Edition
1916081630, 978-1916081635
