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Your bank account pays a 12 percent nominal rate of interest. The interest is compounded quarterly. Which of the following statements is most correct? A.
Your bank account pays a 12 percent nominal rate of interest. The interest is compounded quarterly. Which of the following statements is most correct?
| A. | The periodic rate of interest is 4 percent and the effective rate of interest is greater than 12 percent. | ||
| B. | The periodic rate of interest is 3 percent and the effective rate of interest is 12 percent. | ||
| C. | The periodic rate of interest is 3 percent and the effective rate of interest is greater than 12 percent. | ||
| D. | The periodic rate of interest is 12 percent and the effective rate of interest is greater than 12 percent. | ||
| E. | The periodic rate of interest is 6 percent and the effective rate of interest is 12 percent. |
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