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Which one of the following statements concerning interest rates is correct? Borrowers would prefer monthly compounding over annual compounding given the same annual percentage rate

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Which one of the following statements concerning interest rates is correct? Borrowers would prefer monthly compounding over annual compounding given the same annual percentage rate Savers would prefer annual compounding over monthly compounding given the same annual percentage rate The effective annual rate decreases as the number of compounding periods per year increases The effective annual rate equals the annual percentage rate when interest is compounded annually a

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