Which of the Following Is the Correct Expression for the Effective

question 49

Multiple Choice

Which of the following is the correct expression for the effective annual rate (EAR) ?

• A) (1 / Periodic rate of interest)number of borrowing (interest) periods in one year - 1
• B) (1 + Periodic rate of interest)number of borrowing (interest) periods in one year - 1
• C) (1 - Periodic rate of interest)number of borrowing (interest) periods in one year - 1
• D) (1 + Periodic rate of interest)number of borrowing (interest) periods in one year + 1
• E) (1 - Periodic rate of interest)number of borrowing (interest) periods in one year + 1

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Definitions:

Crowded

A condition or feeling of being overly filled with people or objects, often leading to discomfort.

Claustrophobia

A type of anxiety disorder characterized by an irrational fear of being confined in a small or enclosed space.

Enclosed Places

Areas or spaces that are completely or partially surrounded by walls, barriers, or structures.

Fear

An unpleasant emotion caused by the belief that someone or something is dangerous, likely to cause pain, or a threat.