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Your bank account pays a 12% nominal rate of interest. The interest is compounded monthly. Which of the following statements is correct? -the periodic rate

Your bank account pays a 12% nominal rate of interest. The interest is compounded monthly. Which of the following statements is correct?

-the periodic rate of interest is 1% and the effective rate of interest is 12.5%

-the periodic rate of interest is 1% and the effective rate of interest is 12%

-the periodic rate of interest is 1% and the effective rate of interest is greater than 12.5%

-the periodic rate of interest is 1% and the effective rate of interest is less than 12.5%

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