Question

An interest rate of 17% per year, compounded monthly is (circle one)

a.Effective Annual Rate

b.Nominal Annual Rate

c.Effective Monthly Rate

d.Nominal Monthly Rate

Answer #1

c. Effective monthly rate

When the annual rate is compunded into monthly, it is called as Effective monthly rate.

Interest rates are usually calculated on yearly basis, but when it is broken or divided into monthly, quarterly or semi annually then it gives a more clearer picture. When the annual interest rate is further divided into monthly rate then it gives a perfect analysis and the details can be ascertained on monthly basis which makes the tedious task easy.

Find monthly compounded interest rate if holding period return
(HPR) over one year and a half is 17%
A sum of $5000 is invested at an interest rate of 9% per year.
Find the time required for the money to double if the interest is
compounded continuously

For an annual interest rate of 11% compounded bi-monthly what
it will be the effective annual interest rate?
For an annual interest rate of 12% compounded semi-annually
what it will be the effective annual interest rate?
For an annual interest rate of 12% compounded every 4 months
what it will be the effective annual interest rate?

Given an interest rate of 12% per year compounded monthly, what
is the value at the date t = 0 of a growing perpetual stream of
$200 monthly payments that begin at the date t = 1 (1st
month) and grows at 0.05% per month till perpetuity? (nearest
integer value)
Select one:
a. $20000
b. $2857
c. $21053
d. -$5000

Compute the effective annual rate of interest
a) for 6% compounded monthly
b) at which $1100 will grow to $2000 in seven years if
compounded monthly

Convert an interest rate of 2% per quarter compounded monthly
into a nominal interest rate over the following time periods:
Quarter
Year
Semiannual
Decade
Please include any formulas used. Thanks in advance

Convert 9% annual rate compounded monthly into annual rate,
compounded daily

r=12% per year , compounded monthly, quarterly, seminaually, yearly
, 2 years
effective interest rate

What is the nominal annual rate of interest compounded monthly
on a lease valued at $23,700.00, if payments of $6200.00 are made
at the beginning of every six months for 2 years?
The nominal annual rate of interest is ____%.
(Round to two decimal places as needed.)

1- For an annual interest rate of 10% compounded continuously
what it will be the effective annual interest rate?
2. For an annual interest rate of 10% compounded quarterly what
it will be the effective annual interest rate?
3. For a monthly interest rate of 1.2 % compounded quarterly
what it will be the effective annual interest rate?

Suppose that
$ 5,700
is invested at
5.3 %
annual interest rate, compounded monthly. How much money will be
in the account in
6 months?
24 years?

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