Which of the following statements is false?
A)MFor a given APR, more frequent compounding results in additional return on the investment.
B)An amortized loan is repaid in equal payments over a specified time period.
C)The effective annual rate is determined by multiplying the interest rate charged per period by the number of periods in a year.
D)Each of the above statements is true.

Question

Quizplus · Accepted Answer

The effective annual rate (EAR) is not determined by simply multiplying the interest rate per period by the number of periods. Instead, it accounts for compounding within the year, using the formula: EAR = (1 + i/n)^(n*t) - 1, where i is the nominal rate, n is the number of compounding periods per year, and t is the number of years.

Which of the Following Statements Is False