stated annual interest rate is 11% and the frequency of compounding is daily, the effective annual rate is closest to: A. 11.00%. B. 11.57%. C. 11.63%.
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If the stated annual interest rate is 11% and the frequency of compounding is daily, the effective annual rate is closest to:
A. 11.00%.
B. 11.57%.C. 11.63%.
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- Define the stated (quoted) or nominal rate INOM as well as the periodic rate IPER. Will the future value be larger or smaller if we compound an initial amount more often than annually—for example, every 6 months, or semiannually—holding the stated interest rate constant? Why? What is the future value of $100 after 5 years under 12% annual compounding? Semiannual compounding? Quarterly compounding? Monthly compounding? Daily compounding? What is the effective annual rate (EAR or EFF%)? What is the EFF% for a nominal rate of 12%, compounded semiannually? Compounded quarterly? Compounded monthly? Compounded daily?If the stated annual interest rate is 11% and the frequency of compounding is daily, the effective annual rate is closest to:A. 11.00%.B. 11.57%. C. 11.63%. uSE ECXELIf the effective annual interest rate is 9.58% and the nominal annual rate is 9.25%, compounding is: a. Monthly b. Bi-monthly c. Continuous d. Semi-annual e. Quarterly
- An interest rate is quoted as 4% per annum with quarterly compounding. What is the equivalent rate with (a) annual compounding (b) monthly compounding (c) continuous compoundingIf the effective interest rate is 20% per annum, what is the Nominal Rate if it is? a.Compounded Daily (360 Days) b.Compounded Daily (365 Days) c.Compounded Weekly d.Compounded Monthly e.Compounded Quarterly f.Compounded Semi-Annually g.Compounded AnnuallyAn interest rate of 2% per quarter, compounded continuously, is closest to an effection semi annual rate of: a)2.02% per semiannual period b). 4.00% per semiannual period c). 4.08% per semiannual period d). 2.00% per semiannual period e).5.0% per semiannual period
- Which of the following has the most effective annual rate of interest? A. 12.50 % compounded annually B. 11.95% compounded quarterly C. 12.15% compounded semi-annually D. 11.88% compounded monthlyFind the effective annual rate associated with an 8% nominal rate when interest rate is compounded annuallyIf the accumulated value of an investment that is growing at 3.95% compounded semi-annually is $93,924.39, and the interest earned on this investment is $47,924.39, calculate the time period of this investment. Calculate the effective interest rate for each of the following nominal interest rates: a. 2.73% compounded quarterly. b. 2.73% compounded monthly.
- A certain nominal annual interest rate has an effective rate of 19.722% when compounded continuously. What is its effective rate if compounded bi-monthly? A. 19.87% B. 18.45% C 18% D. 19.41%A rate of 2% per quarter compounded quarterly is closest to what annual compounded interest rate? (a) 2.00% (b) 8.00% (c) 8.24% (d) 24.00%Suppose that an investment promises to pay a nominal 9.6 percent annual rate of interest. What is the effective annual interest rate on this investment assuming that interest is compounded (a) annually? (b) semiannually? (c) quarterly? (d) monthly? (e) daily (365 days)? (f ) continuously? (Note: Report your answers accurate to four decimal places –e.g., 0.0987 or 9.87%.)