Question
Your bank account pays 8.0% stated annual interest rate (or APR). The interest is compounded quarterly. Which of the following statements is CORRECT? a. The
Your bank account pays 8.0% stated annual interest rate (or APR). The interest is compounded quarterly.
Which of the following statements is CORRECT?
a. The quarterly interest rate is 2.0% and the effective annual interest rate is 4.0%.
b. The quarterly interest rate is 8.0% and the effective annual interest rate is greater than 8.0%.
c. The quarterly interest rate is 2.0% and the effective annual interest rate is greater than 8.0%.
d. The quarterly interest rate is 4.0% and the effective annual interest rate is 8.0%.
e. The quarterly interest rate is 8.0% and the effective annual interest rate is 8.0%.
Calculate the effective annual interest rate from the problem above.
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Multinational Financial Management
Authors: Alan C Shapiro, Paul Hanouna
11th Edition
1119559901, 9781119559900
