Question

Which of the following APRs compounded quarterly is equivalent to an APR of 8.15% compounded daily using 360-day calendar years, 30-day months, and 3-month quarters? 7.821% 8.027% 8.233% 8.438% 8.644%

Answer #1

For two different compounding times their value will be equal when their effective annual rate equals

Effective annual rate formula

= (1+r/n)^nt -1

Where n is no of compounding periods

r is rate of interest

Apr 8.15 compounded daily

= (1+0.0815/360)^360 - 1 =8.49%

Now we will calculate effective annual rate for quarterly compounding

= (1+x/4)^4 -1 = 8.49%

By substituting option in the above equation we get x as 8.233%

This also can be solved by using mathmatical equation

= (1+x/4)= (0.0849)^1/4

We get x as 0.08233

Which of the following APRs compounded monthly is equivalent to
an APR of 14.90% compounded quarterly using 360-day calendar years,
30-day months, and 3-month quarters?
Now, Which of the following APRs compounded quarterly is
equivalent to an APR of 7.90% compounded daily using 360-day
calendar years, 30-day months, and 3-month quarters?

Which of the following APRs compounded quarterly is equivalent
to an APR of 8.65% compounded daily using 360-day calendar years,
30-day months, and 3-month quarters?
a) 8.087%
b) 8.306%
c) 8.525%
d) 8.743%
e) 8.962%

Which of the following APRs compounded monthly is equivalent to
an APR of 15.15% compounded quarterly using 360-day calendar years,
30-day months, and 3-month quarters?

Which of the following APRs compounded monthly is equivalent to
an APR of 13.65% compounded quarterly using 360-day calendar years,
30-day months, and 3-month quarters?

Which of the following APRs compounded monthly is equivalent to
an APR of 14.15% compounded quarterly using 360-day calendar years,
30-day months, and 3-month quarters?
12.960%
13.320%
13.680%
14.040%
14.400%

Which of the following APRs compounded monthly is equivalent to
an APR of 13.15% compounded quarterly using 360-day calendar years,
30-day months, and 3-month quarters?
Question 7 options:
12.029%
12.364%
12.698%
13.032%
13.366%

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