The rate of interest actually paid or earned,also called the annual percentage rate (APR),is the ________ interest rate.
A)effective.
B)nominal.
C)discounted.
D)continuous.

Question

Quizplus · Accepted Answer

The effective interest rate takes into account the compounding of interest over a given period of time and is the actual rate of interest paid or earned. The nominal interest rate, on the other hand, is the stated rate of interest before any compounding. Therefore, in this context, the effective interest rate (also known as APR) is the best choice. The other two options, discounted and continuous interest rates, are not relevant in this context.

The Rate of Interest Actually Paid or Earned,also Called the Annual