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Banks are often making statements on interest rates that are not entrely truthful. Below there are five statements made by banks on interest rates and

Banks are often making statements on interest rates that are not entrely truthful. Below there are five statements made by banks on interest rates and you are required to identify the one that is most true. Multiple Choice Savers prefer annual compounding over monthly compounding given the same annual percentage rate (APR). For any positive rate of interest, the annual percentage rate (APR) will always exceed the effective annual rate (EAR). Borrowers prefer monthly compounding over annual compounding given the same annual percentage rate (APR). The effective annual rate (EAR) equals the annual percentage rate (APR) when interest is compounded annually. The effective annual rate (EAR) decreases as the number of compounding periods per year increases

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