Your Bank Account Pays an 8% Nominal Rate of Interest.the

Question 44
Multiple Choice

Your bank account pays an 8% nominal rate of interest.The interest is compounded quarterly.Which of the following statements is CORRECT? A) The periodic rate of interest is 2% and the effective rate of interest is 4%. B) The periodic rate of interest is 8% and the effective rate of interest is greater than 8%. C) The periodic rate of interest is 4% and the effective rate of interest is less than 8%. D) The periodic rate of interest is 2% and the effective rate of interest is greater than 8%. E) The periodic rate of interest is 8% and the effective rate of interest is also 8%.