What Is the Annual Percentage Yield (Or Effective Annual Rate)

question 27

Multiple Choice

What is the annual percentage yield (or effective annual rate) for a nominal rate of 9% compounded quarterly?

• A)9.00%
• B)9.38%
• C)9.42%
• D)9.31%
• E)9.20%

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Definitions:

Birth Rate

The annual number of births per 1,000 people in a population.

Population

The total number of individuals or entities within a defined area or group at a specific time.

Per Annum

An annual rate or measurement, often used in the context of interest rates or financial growth rates.

Compounds Interest

Interest calculated on the initial principal as well as the accumulated interest of previous periods of a deposit or loan.