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    Contemporary Financial Management Study Set 2
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    Exam 6: Continuous Compounding and Discounting
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    Friendly Bank Offers You a Loan at an Annual Interest
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Friendly Bank Offers You a Loan at an Annual Interest

Question 20

Question 20

Multiple Choice

Friendly Bank offers you a loan at an annual interest rate of 10% compounded monthly. What is the effective rate the bank is charging you?


A) 12.68%
B) 10.00%
C) 10.47%
D) 10.83%

Correct Answer:

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