Multiple Choice
Your bank account pays a 5% nominal rate of interest.The interest is compounded quarterly.Which of the following statements is CORRECT?
A) The periodic rate of interest is 5% and the effective rate of interest is also 5%.
B) The periodic rate of interest is 1.25% and the effective rate of interest is 2.5%.
C) The periodic rate of interest is 5% and the effective rate of interest is greater than 5%.
D) The periodic rate of interest is 1.25% and the effective rate of interest is greater than 5%.
E) The periodic rate of interest is 2.5% and the effective rate of interest is 5%.
Correct Answer:
Verified
Correct Answer:
Verified
Q13: If a bank compounds savings accounts quarterly,
Q14: What is the present value of the
Q15: If we are given a periodic interest
Q16: Your sister paid $10,000 (CF at t
Q17: Some of the cash flows shown on
Q19: Your Green Investment Tips subscription is about
Q20: A perpetuity pays $85 per year and
Q21: A "growing annuity" is a cash flow
Q22: You are considering investing in a European
Q23: Suppose you just won the state lottery,