Questions
ACCT 3380 R10 SPRING 2025 Module 5 (2nd half): Practice Questions, Due Sunday 11PM
Single choice
If the effective annual interest rate is 6%, what is the nominal rate or APR (Annual Percentage Rate), given monthly compounding?
Options
A.a. 5.84%
B.b. 6.02%
C.c. 7.02%
D.d. 3.43%
E.e. 5.12%
View Explanation
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Step-by-Step Analysis
The question asks for the nominal APR when the effective annual rate is 6% with monthly compounding.
First, recall the relationship between APR (monthly compounded) and EAR: (1 + APR/12)^12 = 1 + EAR. Here, EAR = 0.06, so (1 + APR/12)^12 = 1.06.
Next, solve for APR/......Login to view full explanationLog in for full answers
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