In any Excel functions that use rate (e.g. PMT, IRR, NPV), the correct way to enter a monthly rate when the annual interest rate is 4 percent is __________.
A) 0.04
B) 0.04/12
C) 4
D) 4/12

Question

Quizplus · Accepted Answer

The correct way to enter a monthly rate when the annual interest rate is 4 percent is to divide the annual rate by 12 (the number of months in a year). Therefore, 0.04 (4%) divided by 12 gives the monthly interest rate, which corresponds to choice B.

In Any Excel Functions That Use Rate (E