Nominal Interest Rate Is Calculated by

question 54

Multiple Choice

Nominal interest rate is calculated by

• A)summing up all interest rates for all compounding periods.
• B)converting a given interest rate with a compounding period to an equivalent interest rate with a one-year compounding period.
• C)dividing the interest rate per compounding period by the number of compounding periods per year.
• D)multiplying the simple interest rate by the number of years.
• E)multiplying the interest rate per compounding period by the number of compounding periods per year.

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Definitions:

Total Cost Concept

The total cost concept is an approach in economics and accounting that considers all costs related to the production and delivery of a product or service, including fixed, variable, and indirect costs.

Rate of Return

The gain or loss on an investment over a specified period, expressed as a percentage of the investment’s cost.

Markup Percentage

The fraction applied on top of the buying price of products to include expenses for overhead and yield a profit.

Markup Percentage

The percentage by which the cost of a product is increased to determine its selling price.