(Question a). period interest rate equal? 1. Under what conditions are the effective annual interest rate and the (a) Never True (b) If the number of compounding periods per year is 1. (c) If the number of compounding periods per year is infinite (d) Always true (Question b). You borrow $5,000 at 10 per cent per year and will pay off the loan in three equal annual payments starting 1 year after the loan is made. The end of year payments is $2,010.57. Which of the following is true for your payment at the end of year 2? (a) Interest is $500. And principal is 1,510.57 (b) Interest is $450. And the principal is $1,560.57 (c) Interest is $384.94. and principal is $1,661.63 (d) Interest is 182.78 and principal is $1,1827.79