Your Bank Pays a Quoted Annual (Nominal)rate of 12

question 246

Multiple Choice

Your bank pays a quoted annual (nominal) rate of 12%. However, it compounds interest every week (52 times a year) . What is the effective annual rate (EAR) ?

• A)Less than 12%
• B)Exactly 12%
• C)12.01% - 12.35%
• D)12.36% - 12.70%
• E)More than 12.70%

---

Definitions:

Gold Medal

An award given for first place in a competition, often made of, or resembling, gold.

Interdependent Self-construal

A perspective in which individuals see themselves as interconnected with others and define their identity in the context of social relationships.

Mandatory Retirement

A policy or practice that requires employees to retire at a certain age regardless of their personal or professional circumstances.

Cultural System

A coherent set of beliefs, practices, symbols, and values shared by a group of people, which helps them interpret their world and interact within it.