What Is the Effective Annual Rate of 12% Compounded Monthly

question 93

Multiple Choice

What is the effective annual rate of 12% compounded monthly?

• A) 11.27%
• B) 12.00%
• C) 12.36%
• D) 12.54%
• E) 12.68%

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Definitions:

Resources

Assets, both tangible and intangible, that are owned or controlled by a business and can produce value.

Adapt

The act of making adjustments or changes in order to better suit a new environment, situation, or set of conditions.

Liquidity

The ease with which an asset or security can be converted into ready cash without affecting its market price.

Asset

An asset is a resource owned or controlled by an individual, corporation, or government with the expectation that it will produce positive economic value.